DRC: Senate passes bill liberalizing the insurance sector

May 21, 2014

Senators of the Democratic Republic of Congo (DRC) adopted on Friday (16 May) a bill modifying the Insurance Code to liberalize the insurance sector. This vote puts an end to the monopoly of the National Insurance Corporation (Sonas), now a commercial entity.

Senators of the Democratic Republic of Congo (DRC) adopted on Friday (16 May) a bill modifying the Insurance Code to liberalize the insurance sector. This vote puts an end to the monopoly of the National Insurance Corporation (Sonas), now a commercial entity.

According to the Chairman of the Senate Committee, Evariste Mabi Mulumba, quoted by newspaper Le Potentiel, the liberalization of the insurance sector implies that the state must assume its responsibilities towards the regulation and control of the market.

He believes that the creation of a regulatory body is required, along with
the
setting up of an advisory council of insurance whose mission would be to make recommendations on ways to improve the services provided by
insurance
companies.

The Congolese Vice-Minister of Finance, Roger Shulungu said in March that this monopoly has shown its limits and deprived the country of enormous financial resources, Radio Okapi reports.

The development of the insurance market should, according to experts, have beneficial effects on the financial system and businesses' access to finance.

The sector can play an important role in reducing the risks associated with agriculture, such as natural disasters, which are partly responsible for the low level of funding for agricultural enterprises.

Products such as insurance compensating for specific climate risks, or certain types of livestock insurance, as well as products based on indices can serve as collateral to access a loan from a bank or microfinance institution.ADNFCR-2976-ID-801721897-ADNFCR