Payment Systems in Madagascar

Project Development Objective (PDO)

This project aims to support the Central Bank of Madagascar to set up independent supervisory functions, improve the legal/regulatory, and supervisory framework for the insurance sector.


The authorities have requested technical assistance to implement the 2016 FSAP recommendations related to the insurance sector particularly in particular, to transfer supervision of insurance companies from Ministry of Finance to the Central Bank of Madagascar. This will require a review of the legal framework, assessment on the new supervisory unit on insurance in the Central Bank including organizational structure, staffing, functions, and capacity building of supervisory staff. Although the current insurance supervisors in the Ministry of Finance are expected to be transferred to the Central Bank, this will be based on the skills matching. In addition, new supervisors are likely be required. The support will also, importantly, take advantage of the process of amending the insurance law to facilitate a more modern and framework approach that will facilitate future planned reforms more readily and will reflect current international best practices

Activities / Output

The expected activities include the following:
1.      Market Assessment: market assessment report will serve as initial consultative report on industry structure, development, regulation and supervision and products including microinsurance and agriculture insurance. After consultation on a draft report through a seminar, a final report which establishes an agreed baseline for the proposed reforms will be produced.  This report will, therefore, serve as a basis for the remaining components of the project.
2.      Legal and Regulatory Framework: review the legal and regulatory framework and provide recommendations on amendments including ensuring the independence of the supervisory body, adequate prudential framework, accounting and reporting requirements, and enforcement powers.
3.      Supervisory Structure: provide support for the design and implementation of the supervisory functions by the CB: assessment on the supervisory unit (structure, staffing, skills needed, etc.)
4.      Risk-Based Supervision: shift toward a more risk and less compliance oriented approach to supervision. 

Expected Outcomes

The expected outcome are:
1.      Increased independence for the supervisory body, with adequate knowledge and skills to perform the supervisory mandate; and
2.      Legal framework amended to support effective supervision in line with international best practice