Rwanda: Apex Bank Suspends Registration of New Insurance Companies

Mar 03, 2017

The insurance sector’s contribution to the national economy is not promising.

In a bid to maintain financial stability, the National Bank of Rwanda (NBR) has suspended licensing new insurance companies indefinitely, disclosed in a communiqué. The communiqué reads that "considering the need to streamline the insurance sector to strengthen the financial stability and soundness, the NBR informs the public that it has with immediate effect placed moratorium to the licensing of new insurance companies until further notice." This development does not apply to usual activities conducted into existing insurance companies including opening new branches, approval of new products and services, transfer and purchase of shares, acquisition, takeovers and fusion. According to Bonaventure Sangano, the Head of insurance companies at Central Bank of Rwanda, "the notice is not applied to the pension scheme but only insurance companies, and private companies willing to register as pension providers are not affected by this announcement." John Rwangombwa, Governor Central Bank of Rwanda says contribution of insurance firms to Rwanda economy is still minimal. The insurance sector's contribution to the national economy is not promising. According to the monetary policy and financial stability statement published on February 22, demand deposits of insurance companies in banks declined from Rwf 23.8 billion to Rwf 17.7 billion in 2015 and 2016 respectively.