The Commissioner of the Sierra Leone Insurance Commission (SLICOM), Arthur Yaskey, has on Thursday, July 2, 2020 said that presently the insurance sector contributes less than one percent of the Gross Domestic Product (GDP) in the country.
Commissioner Arthur Yaskey made this comment during the signing ceremony of a Memorandum of Understanding between the Commission and the Sierra Leone Local Content Agency, held at the conference hall of Local Content Agency in Freetown.
The essence of the MoU is to deepen the insurance penetration in the country and thus ensure that the insurance sector contributes its fair share to the country’s GDP.
Commissioner Yaskey disclosed that the current state of the contribution of the insurance sector to the country’s economy is very dismal.
“This dismal performance by the insurance sector calls for urgent measures to enable the sector to increase its participation in the national economy,” he added. “To achieve this, certain sections of the 2016 Insurance Act need to be complied with especially by multi-nationals and some importers,” he said.
He said that it is not good enough for any company operating in Sierra Leone to say that their risks in the country are covered by their global insurance covers, noting that the insurance law is very clear on the issue and would be a matter of compliance from then.
Commissioner Yaskey emphasized, “Section 106 of the Insurance Act 2016 states very categorically that All properties and liabilities within Sierra Leone shall be insured with an insurer registered under this Act.
Section 107 (1) states that “Subject to subsection (3) an insurance in respect of goods to be imported into Sierra Leone shall, after the commencement of this Act, be made with an insurer registered under this Act.”
Commissioner Yaskey explained that the section needs some explanation, adding that the Act does not make it compulsory for importers to insure, but if they were to effect insurance cover on their import into Sierra Leone, they must take the cover with a locally registered insurance company and not with insurance companies overseas. “I fervently hope that the importers of rice and petroleum products into Sierra Leone are listening to this, or they would read it in the print media! Please do not maintain that our insurance companies do not have the capacity,” he said. “How will they have it if you do not give them a chance to start somewhere?” he asked rhetorically.
Commissioner Yaskey made a policy statement that, when the Market Practices and Guidelines for the Insurance Industry would have been incorporated into the Regulations of the 2016 Insurance Act, which will be very soon, a number of insurance covers would be domesticated. “These are Motor Insurance, Life Insurance, Personal and Group Personal Accident Covers,” he explained. “What this basically means is that an insurer cannot re-insure these risks overseas as they may not require foreign currency in the event of a claim.”
He said that all claims under the said covers are normally settled in the local currency, adding that if an insurer wanted to reinsure such a cover, there would be enough capacity in the local market to absolve such a risk.
He described the presence of WAICA Re, a re-insurer in the market in Sierra Leone, as fortunate and asserted that that company can adequately provide requisite insurance cover, and also stated that it would invariably help in a small way to conserve our foreign currency and thus help in the balance of payment.
He said that in terms of reinsurance, the local capacity has to be exhausted before any insurer decides to place a risk overseas, and stated that the Commission would be looking closely into composition of staff in the insurance institutions, to make sure that expected preferences are given to Sierra Leoneans where they have the requisite qualification and experience.
By Stephen V. Lansana
07/07/2020. ISSUE NO.: 7860