New Capital Requirements for Licensed Insurance Companies

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The Central Bank of Liberia (CBL) has stated that the ongoing implementation of the capital requirements for all licensed insurance companies operating in Liberia remains on course and in line with the CBL regulation issued in 2015 and amended in 2016. The regulation sets the capital requirement for each class of insurance business, and requires each insurance company to maintain a minimum capital requirement based on the category of insurance activity being undertaken by a company.

Under the regulation, General/Non-Life Insurance Business must maintain a minimum capital requirement of US$1,500,000 (One million five hundred thousand U.S. dollars); Life Insurance Business, a minimum capital requirement of US$750,000 (Seven hundred fifty thousand U.S. dollars); and Reinsurance, a minimum capital requirement of US$5,000,000 (Five million U.S. dollars).

The CBL said in a public notice that the implementation of the regulation, which began September 30, 2016, is being executed in stages, on a quarterly basis over a period of three years, to allow for flexibility. The implementation of the capital requirements is part of the reform agenda of the CBL aimed at strengthening the insurance sector by ensuring safety and soundness of the industry through adequate capitalization, strong corporate governance, adequate risk management and reinsurance arrangements, among others. The move, the bank noted, is in line with its mandate under the New Insurance Act of 2013 as the Regulator and Supervisor of the Insurance Industry of Liberia.

The CBL assured policy holders, creditors and the general public engaged in business with the insurance industry that the implementation of the revised capital requirement is intended to ensure that insurance companies operating in Liberia are adequately capitalized at all times to meet their claims and other future obligations under their insurance policies as well as unexpired risks as and when they are due. “The CBL will remain resolute in reforming the Liberian insurance industry in line with its mandates under the New Insurance Act of 2013 and other insurance laws,” the bank said in its public notice.

1 COMMENT

  1. Since the Central Bank of Liberia (CBL) is REQUIRING Non- Life Insurance Companies to maintain a minimum capital requirement of US$1,500,000 (One million five hundred thousand U.S Dollars) to ensure ” safety and soundness of the industry through adequate capitalization”, can we, the Liberian People, REQUIRE the CBL to STOP paying out US$300,000 to ex-employees, and printing L$5 billion in new money out of thin air, to ensure the “safety and soundness” of OUR bank??

    Go to the CBL website and look for their audited financial statements. Pay close attention to the Cash Flow and Income Statements, and read the notes to the Financial Statement. You will see that the CBL is drowning in red ink! Every year, since 2010, the CBL have posted losses, if you exclude their accounting tricks!. You’ll also see that while losing money every year, CBL’s administrative expenses keep increasing by the millions and millions of dollars! From US$9 million (2010) to US$34 million (2015)!

    Would you consider such entity (CBL) financially “safe and sound”?? I wouldn’t. But yet the CBL wants to ensure the “safety and soundness” of YOUR business entity! Hypocrites!

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