Strengthening Insurance Supervision in West Bank and Gaza
Project Development Objective (PDO)
This project aims to strengthen regulation and supervision of insurance companies in the West Bank and Gaza. These efforts will help to promote efficient, fair, safe, and stable insurance markets for the benefit and protection of insurance policyholders.
Background
Increased complexity of insurance companies and the need for a greater level of consumer confidence have compelled the Palestine Capital Markets Authority (PCMA) to improve its supervision of the insurance sector in the West Bank and Gaza (WBG).
Through a guided self-assessment against the International Association of Insurance Supervisors’ 2011 Insurance Core Principles (ICPs), conducted from November 2013 to January 2014, the PCMA identified a number of deficiencies in insurance regulation and supervision in WBG. In an effort to comply with the ICPs, the PCMA developed an action plan that listed priority reforms to implement in the short term (the next 12 months). These reforms included (a) developing a framework and capacity for risk-based supervision (ICPs 8 and 9), (b) drafting regulations for solvency (ICP 12), and (c) addressing regulation and supervision of reinsurance (ICP 13).
Activities
The expected main outputs of this project are as follows:
Output 1: The project team aims to improve risk-based supervision of the insurance sector by (a) developing technical and regulatory tools, (b) building capacity, and (c) drafting a risk-based supervisory framework. The supervisory framework will set out the principles, concepts, and core processes that the PCMA will use to guide its supervision of the insurance sector.
Output 2: The project team is strengthening the framework for dissolution by drafting regulations and procedures for the dissolution of insurers, and by delivering training programs and providing training manuals to relevant PCMA staff members.
Output 3: The project also aims to strengthen reinsurance supervision through regulation, procedures, and capacity building—which can include drafting amendments to current reinsurance regulations—and to develop manuals for reinsurance supervision and training.
Expected Outcomes
The expected outcomes of this project are as follows:
1. Implementing risk-based supervision (compliant with ICP 9)
2. Establishing a regulatory and supervisory framework for insurers’ compliance with ICPs (12)
3. Improving the regulatory framework for and supervision of reinsurance (compliant with ICP 13)
4. Improving compliance with prudential regulations by insurers, reducing the risk of failure to meet
claims, and improving consumer confidence and protection