Legal and Regulatory Frameworks
The National Insurance Authority is a statutory entity established by under the National Insurance Authority Act 92/2020 for the general supervision and development of Somaliland’s insurance industry. The National Insurance Authority Act 92/2020 establishes the Authority’s powers and activities. The NIA’s main goals include promoting competition to improve customer satisfaction through improved consumer choice and reasonable pricing, while also guaranteeing the financial stability of the insurance sector. It gives the authority to draft regulations that provide the regulatory framework for the sector’s companies.
Commencement of Insurance Acts and Regulations
Significant progress has been made in the design of Act and Regulations for the better implementation of the Insurance requirements in Somaliland. The National Insurance Authority Act no. 92/2020 was adopted and signed off by the President during the year of 2021.
Regulations and circulars
The National Insurance Authority also issued regulations, which included:
- Licensing Requirement for Insurance companies
- Third- Party Motor Liability Insurance.
The Regulations will have a substantial influence on the insurance sector in terms of management structure and governance, policyholder protection and business behavior, and the
regulator’s supervisory approach.
Licensing Requirement for Insurance companies
This regulation sets a slew of governance requirements on insurers, the most notable of which are corporate governance changes. Insurers must establish and maintain proper governance structures that define board and management roles. The board’s membership is mandated to achieve balance, with the majority of members being independent and Somaliland residents. The governance reforms will ensure that licensees are better managed so that they remain financially stable and continue to operate. The Regulation also establishes business standards by establishing parameters for marketing insurance products, handling complaints, and providing prospective customers with a Key Features Statement. This will surely defend the rights and interests of policyholders.
Third- Party Motor Liability Insurance.
The National Insurance Authority prepared the Draft Mandatory Motor Third-Party (MTP) Vehicle Insurance Regulations with technical input from experts. The Ministry of Transport and Roads Development, as well as the Ministry of Finance Development, have cooperated together with the National Insurance Authority to implement the third-party motor legislation. The new regulation would guarantee that accident victims are protected from the costs of recovering from an accident.