Insurance & reinsurance

Insurance law

Insurance law is a fascinating discipline embracing several categories of insurance contracts — that is, cover against the various risks that individuals and businesses alike may encounter. Insurance companies do not grant these covers at a loss: they must recover their outlay, and so they calculate the cost price of each risk — the premium.

Insurance policies contain a body of clauses, or wording, at times impenetrable to the lay policyholder, who would be well advised — above all where the insured is a business and the sums insured are substantial — to have it legally reviewed by our specialist lawyers. He would be surprised to discover that the level of the deductible or the nature of the exclusions sometimes empties the cover of its substance.

Broadly, a distinction is drawn between property and casualty insurance and personal insurance. The former includes motor insurance, home insurance, corporate fire insurance and the other liability covers (ten-year builders' liability, professional indemnity, operational liability, and so on). Personal insurance covers life and death, illness, disability, etc.

We represent policyholders — mainly businesses — as well as insurance companies, acting for the greater part of the Moroccan insurance market, for which we recover premium arrears from intermediaries and end policyholders alike. We defend insurance companies in claims settlement across all classes of business, and pursue liable third parties under statutory or contractual subrogation.

ACAPS regulation and licensing

We also advise market participants on the public law of insurance, that is, on their dealings with the supervisory authority, ACAPS, in obtaining, amending or surrendering a licence.

This practice covers the grant and extension of insurance and reinsurance company licences by class of operations, the licensing and registration of intermediaries — tied agents and brokers —, the authorisation of bancassurance operations and alternative distribution networks, and the authorisations attached to acquisitions of shareholdings, changes of control, portfolio transfers and restructuring transactions subject to the Authority's approval.

On the prudential framework, we advise on the covering of technical liabilities, the rules on investment and admission of assets, the solvency margin and the transition to risk-based solvency, technical provisioning, governance and key functions, internal control, the anti-money-laundering framework, and policyholder-protection obligations. We assist our clients throughout on-site inspections, in drafting responses to letters of observations and, where necessary, in their defence in disciplinary proceedings.

Participative insurance and takaful

The development of takaful insurance in Morocco raises questions that the ordinary law of insurance cannot resolve on its own. We support operators on the structuring of takaful funds and participants' accounts, on the interplay between the compliance opinion of the Higher Council of Ulema and ACAPS's prudential framework, on the drafting of contracts and marketing documentation, and on the mechanics of management on behalf of participants, of the technical surplus and of the manager's cash advance.

This practice draws directly on our experience of participative banking, of which takaful is the indispensable companion in Mourabaha and Ijara structures.

Reinsurance law

Reinsurance is a highly distinctive field, with its own international market practices, its players, its workings and its specific means of dispute resolution.

In Morocco, over the past decade, the reinsurance market has been liberalised, meaning that any foreign reinsurer may enter the Moroccan market and offer capacity to local cedants.

We advise major reinsurers, domestic and international alike. We have developed a thorough command of the issues attaching to the reinsurance business generally: the licensing procedure before the supervisory authority, and the drafting of reinsurance treaties, cover slips and settlement protocols. We can assist any reinsurance operator, whatever its international rating, whether in its plan to open a representative office or in its plan to expand its activities in Morocco and Africa.

Our work covers proportional and non-proportional treaties — quota share, surplus, excess of loss, stop loss —, facultative reinsurance, and claims-control, follow-the-fortunes, arbitration and governing-law clauses. We handle the cross-border questions that flow from them: licensing and taxation of non-resident reinsurers, exchange-control rules and transfers of premiums and claims, compliance with international sanctions regimes, and the interplay of multinational programmes with admitted local policies.

We produce preliminary and due diligence studies which, on the one hand, answer reinsurers' questions by describing the current reinsurance market in Morocco and Africa and, on the other, enlighten them on the regulatory framework specific to facultative reinsurance and particular retrocession; the regulatory framework governing the provision of reinsurance capacity to Moroccan cedants by foreign reinsurers, namely: treaties and the rules on receivables admitted as cover for technical provisions, together with the legal framework of the latest regulatory developments concerning compulsory covers that could prove highly lucrative for reinsurers — contractors' all risks (CAR) and ten-year builders' liability; and the possibility of setting up representative offices in order to enjoy the several tax exemptions and incentives attached to CFC status, from which certain reinsurance players such as IGI, AIG, Trust Re, Chedid Re, Lockton and others have benefited.

In reinsurance litigation and arbitration, the reading of the treaty and the chronology of the claims notices most often decide the outcome of the dispute.

Insurance litigation

We plead before the Moroccan courts and before arbitral tribunals, for claimants and defendants alike: coverage disputes and declined claims, declaration of the risk, misrepresentation and nullity, the two-year limitation period, subrogation and recourse against liable third parties.

We handle complex claims in property damage, machinery breakdown, business interruption, transport and civil liability, as well as construction insurance, professional indemnity, directors' and officers' liability and credit insurance disputes. And life-insurance litigation, particularly in its inheritance and international dimension, where our practice of international inheritance law often changes the game.

An integrated practice

Banking, capital markets and insurance are not handled separately at our Firm. The same logics of governance, solvency, compliance and consumer protection run through all three, under three different authorities — Bank Al-Maghrib, the AMMC and ACAPS. That matters in transactions that cross sectoral boundaries: bancassurance, credit insurance backed by bank financing, portfolio guarantees, unit-linked savings products, or insurance distribution by payment institutions and FinTech players.

Frequently asked questions

Do you assist with licence applications before ACAPS?

Yes — for insurance and reinsurance companies, for intermediaries, and for transactions subject to authorisation: acquisitions of shareholdings, changes of control and portfolio transfers.

Do you act for foreign reinsurers?

Yes. We advise non-resident reinsurers on access to the Moroccan market, the structuring of their treaties, exchange-control rules and compliance with international sanctions, and represent them in litigation and arbitration.

Do you handle complex claims litigation?

Yes: property damage, business interruption, construction, professional indemnity, directors' and officers' liability, credit insurance and life insurance.

How does your insurance practice fit with your banking practice?

The two are handled together, within a single approach to the regulated financial sector. That allows us to cover bancassurance, credit insurance and insurance-based savings products without any break in expertise.