Governance, Risk and Compliance – The Burundian Insurance Industry

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Published: September 28, 2018 Report Code: GDIS0175RR-ST

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Burundi Insurance Industry Report Overview

The Burundi insurance industry research report provides a detailed analysis of the insurance regulations for life, property, motor, liability, personal accident, and health, and marine, aviation, and transit insurance. The report specifies various requirements for the establishment and operation of insurance and reinsurance companies and intermediaries. It also gives insurers access to information on prevailing insurance regulations, and recent and upcoming changes in the regulatory framework, taxation, and legal system in the country. Moreover, it includes the scope of non-admitted insurance in the country.

Burundi Insurance Industry Dynamics

The Burundian insurance industry is governed by the ARCA, with its guidelines for regulating the industry stipulated in the Insurance Code 2014. The Ministry of Finance, on the advice of the ARCA, grants licenses to conduct insurance business in Burundi. Article 279 of the Insurance Code 2014 stipulates that it is prohibited for any person or entity to operate insurance or reinsurance business in Burundi without prior approval, or accordance with the provisions of the code from the ARCA. Article 280 of the regulation stipulates that all insurance transactions by an unauthorized company are null and void.

Burundi Insurance Industry - License Types

To underwrite and sell insurance products, insurers need to be authorized by the Ministry of Finance under advice of the ARCA. The types of licenses provided by the ARCA are life insurance license, non-life insurance license, composite insurance license, reinsurance license, and license for intermediaries.

Life Insurance License: An insurer with a life insurance license can underwrite and sell insurance contracts related to life, insurance linked to investment funds, tontines, and capitalization.

Non-Life Insurance License: A company with a general insurance license can operate in accident insurance, health insurance, motor insurance, railway insurance, aviation insurance, marine insurance, transit insurance, and fire and natural perils insurance among others.

To know more about the license types in the Burundi insurance industry, download a free report sample

Burundi Insurance Industry - Key Bodies

The key bodies that oversee the Burundi insurance industry are the Agency of Regulation and Insurance Supervision (ARCA) and African Insurance Organization (AIO).

Agency of Regulation and Insurance Supervision (ARCA): Established in 2002, ARCA under the Decree on Agency for Regulation and Control of Insurance, with the aim to supervise and regulate the industry. It is primarily responsible for formulating industry regulations, and licenses issued by the Ministry of Finance are provided upon the ARCA’s advice to insurers.

African Insurance Organization (AIO): The Burundi insurance industry is regionally regulated by the AIO, which was established in 1972. It is a non-governmental organization recognized by many African governments. The AIO’s objectives are to develop a healthy insurance and reinsurance industry in Africa, promote inter-African cooperation in the insurance industry, promoting special work programs, production of the African Insurance Annual Review, as well as conference and seminar documents, and organizing insurance related seminars and conferences.

To know more about the key bodies governing the Burundi insurance industry, download a free report sample

Burundian Insurance Industry Market Overview

Key Regulatory Bodies Agency of Regulation and Insurance Supervision (ARCA) and African Insurance Organization (AIO)
Key License Types Life Insurance License, Non-Life Insurance License, Composite Insurance License, Reinsurance License, and License for Intermediaries

Scope

The report provides insights into the governance, risk, and compliance framework pertaining to the insurance industry in Burundi, including –

An overview of the insurance regulatory framework in Burundi.

  • The latest key changes, and changes expected in the country’s insurance regulatory framework.

  • Key regulations and market practices related to different types of insurance product in the country.

  • Rules and regulations pertaining to key classes of compulsory insurance, and the scope of non-admitted insurance in the country.

  • Key parameters including licensing requirements permitted foreign direct investment, minimum capital requirements, solvency and reserve requirements, and investment regulations.

  • Details of the tax and legal systems in the country.

Key Highlights

  • The Burundian insurance industry is regulated by the ARCA

  • Motor third-party liability insurance, professional indemnity insurance for doctors, professional indemnity insurance for lawyers, insurance for administrative buildings against fire or explosion, civil liability insurance for operators of commercial buildings against fire or explosion, construction risk insurance, professional liability insurance for brokers and import insurance are compulsory in Burundi

  • Composite insurance is not permitted in Burundi.

  • Non-admitted insurance is not permitted by law. However, risks for which local capacity is not available are permitted to be placed with unauthorized insurers

  • 100% FDI is permitted in the Burundian insurance industry.

For more insights on the Burundi insurance industry, download a free report sample

Reasons to Buy

  • Provides FAQ-style analytical insights comprising 129 knowledge elements on insurance compliance applicable to the country.

  • Gain insights into the insurance regulatory framework in Burundi.

  • Track the latest regulatory changes and expected changes impacting the Burundian insurance industry.

  • Gain detailed information about the key regulations governing the establishment and operation of insurance entities in the country.

  • Understand key regulations and market practices pertaining to various types of insurance product.

Table of Contents

Table of Contents

1 INTRODUCTION 6

1.1 What is this Report About? 6

1.2 Definitions 6

2 GOVERNANCE, RISK AND COMPLIANCE 8

2.1 Legislation Overview and Historical Evolution 9

2.2 Latest Changes in Regulation 10

2.3 Legislation and Market Practice by Type of Insurance 16

2.3.1 Life insurance 18

2.3.2 Property insurance 20

2.3.3 Motor insurance 22

2.3.4 Liability insurance 23

2.3.5 Marine, aviation and transit insurance 24

2.3.6 Personal accident and health insurance 24

2.4 Compulsory Insurance 25

2.4.1 Motor third-party liability insurance 25

2.4.2 Professional indemnity insurance for doctors 28

2.4.3 Professional indemnity insurance for lawyers 29

2.4.4 Civil liability insurance for operators of commercial buildings against fire or explosion 30

2.4.5 Insurance for administrative buildings against fire or explosion 31

2.4.6 Construction risk insurance 31

2.4.7 Financial guarantee/professional liability insurance for insurance intermediaries 32

2.4.8 Insurance for import of goods 33

2.5 Supervision and Control 35

2.5.1 The African Insurance Organization 35

2.5.2 Agency of Regulation and Insurance Supervision 36

2.6 Non-Admitted Insurance Regulations 37

2.6.1 Overview 37

2.6.2 Intermediaries 37

2.6.3 Market practices 38

2.6.4 Fines and Penalties 38

2.7 Company Registration and Operations 39

2.7.1 Type of insurance organization 40

2.7.2 Establishing a local company 40

2.7.3 Foreign ownership 41

2.7.4 Types of license 41

2.7.5 Capital requirements 42

2.7.6 Solvency margin 42

2.7.7 Reserve requirements 44

2.7.8 Investment regulations 44

2.7.9 Statutory return requirements 45

2.7.10 Fee structure 45

2.8 Taxation 47

2.8.1 Insurance premium or policy taxation 47

2.8.2 Withholding taxes on premium paid overseas 47

2.8.3 Corporate tax 47

2.8.4 VAT 48

2.8.5 Captives 48

2.9 Legal System 49

2.9.1 Introduction 49

2.9.2 Access to court 49

2.9.3 Alternative dispute resolution 50

3 APPENDIX 51

3.1 Methodology 51

3.2 Contact GlobalData 51

3.3 About GlobalData 52

3.4 GlobalData’s Services 53

3.5 Disclaimer 54

Table

List of Tables

Table 1: Insurance Industry Definitions 6

Table 2: Burundi – Insurance Regulatory Framework Key Features 8

Table 3: Burundi – Non-life Insurance – Commission Rates for Insurance Brokers 12

Table 4: Burundi – Fees for Services Rendered by the ARCA 12

Table 5: Burundi – Life Insurance Regulatory Framework 18

Table 6: Burundi – Property Insurance Regulatory Framework 20

Table 7: Burundi – Motor Insurance Regulatory Framework 22

Table 8: Burundi – Liability Insurance Regulatory Framework 23

Table 9: Burundi – Corporate Tax Rates for the Financial Year 2018 47

Figures

List of Figures

Figure 1: Burundi – Insurance Supervision and Control at Various Levels 35

Figure 2: Burundi – Insurance Regulatory Frameworks for Company Registration and Operation 39

Frequently asked questions

  • Who is the key regulator of the Burundi insurance industry?

    The insurance industry in Burundi is regulated by the Agency of Regulation and Insurance Supervision (ARCA).

  • What are some of the primary responsibilities of the ARCA?

    ARCA under the Decree on Agency for Regulation and Control of Insurance, with the aim to supervise and regulate the industry. It is primarily responsible for formulating industry regulations, and licenses issued by the Ministry of Finance are provided upon the ARCA’s advice to insurers.

  • Who are the other regulators of the Burundi insurance industry?

    The African Insurance Organization (AIO) is a non-governmental organization recognized by many African governments. Its objectives are to develop a healthy insurance and reinsurance industry in Africa, promote inter-African cooperation in the insurance industry, promoting special work programs, production of the African Insurance Annual Review, as well as conference and seminar documents, and organizing insurance related seminars and conferences.

  • What are the key license types in the Burundi insurance industry?

    The key types of licenses issued in the Burundi insurance industry are life insurance license, non-life insurance license, composite insurance license, reinsurance license, and license for intermediaries.

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