Policy brief on MENA insurance sector

DUBAI: The Hawkamah Institute for Corporate Governance (Hawkamah) and the Arab Forum of Insurance Regulatory Commissions (AFIRC) announced on Mar 22 the release of the policy brief on corporate governance for the insurance industry in the Middle East and North Africa (MENA) region.
It hopes the recommendations contained in the policy brief will form the basis for creating a minimum standard for the MENA insurance sector as agreed upon by the region's insurance industry regulators.
The policy brief concluded that insurance companies operating in the MENA region have varied strengths and currently face significant challenges in view of the ongoing global financial crisis, the two organisations said in a press release.
"The strengths include recognition of the importance of the role of the financial services sector, of maintaining a strong reputation and financials, and of making a contribution to the community. Many institutions have demonstrated their commitment to accountability, transparency, and fulfilling obligations to their stakeholders and policyholders," it said.
Concurrently, it noted that many companies face challenges in achieving proper corporate governance as defined by leading international professional and regulatory agencies.
"Such challenges also exist in most other regulated markets and are often based on accepted practices within those markets," it said.
The actionable items outlined by the brief include committing to good corporate governance; good board practices; adopting and maintaining minimum levels of transparency and disclosure; ensuring an effective control environment; and protection of policyholders and shareholders rights.
Dr Nasser Saidi, board member of Hawkamah, said the lack of good corporate governance contributed to the current global financial crisis, which has affected the insurance industry.
"The need for the global insurance industry to implement sound corporate governance practices is all the more pressing in view of the crisis. This is particularly so in the MENA region, where the insurance industry, both conventional and Islamic, has been underdeveloped, but is now growing fast.
"Within the MENA region, the rapid rise of Shariah-compliant insurance and re-insurance provides an additional incentive for strong standards to be quickly developed," he said.
Dr Bassel Hindawi, director general of the Insurance Commission of Jordan and chairman of AFIRC said commitment to corporate governance standards will reflect positively on the management of the insurance companies, by efficient use of its resources, improve market competitiveness, and strengthening the stability of financial markets." - The Malaysian Reserve, p32, Apr 1, 2009

CAPTION: Shaping policy for MENA press conference was attended by (from right to left) Dr Saidi, Dr Hindawi and Mark Dempsey who is the country director for Jordan and Middle East pepresentative.