According to a public note, published on the website of the Ministry of Finance, which cites a circular from the Angolan Insurance Regulation and Supervision Agency (Arseg) the provision stems from the difficulties some operators have in making calculations of the solvency margin.
The minimum legal solvency margin is supported by the executive decree of the Insurance Companies Law.
The minimum capital required for insurance and pension fund management in the country is fixed in foreign currency.
For this reason, Arseg explains, the amount obtained for the minimum legal solvency margin and the legal minimum guarantee fund "must be converted into kwanzas" and the average exchange rate of the Banco Nacional de Angola may be used, with reference to 31 December 2019 until the insurance business law comes into force.
In the circular, signed by Arseg's board of directors, this body stresses that the minimum legal solvency margin for insurance companies that cumulatively operate the "life" and "non-life" activity is obtained separately between both activities.
"The percentage of 14 per cent should be used to calculate the "life" and "non-life" activities", reads in the document.
Arseg also clarifies that in view of the economic and financial aspects and the "desirable comparability and uniformity" in the assessment and understanding of this matter, in the framework of the solvency of the sector, it is necessary to issue "instructions for the purpose of calculating the minimum legal solvency margin".
