FSC releases Consultation Paper on the proposed Regulatory Framework for Peer to Peer (P2P) Insurance
FSC releases Consultation Paper on the proposed Regulatory Framework for Peer to Peer (P2P) Insurance
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As part of its strategy to enhance the fintech ecosystem, the Financial Services Commission (FSC) of Mauritius issued a Consultation Paper on the proposed regulatory framework for Peer to Peer (P2P) Insurance on 18 March 2024 (the “Consultation Paper”). The consultation paper seeks input to develop a comprehensive regulatory framework that will support the growth and ensure the sustainability of P2P Insurance in Mauritius. This approach reflects the FSC’s commitment to fostering innovation while maintaining robust oversight in the financial sector.
P2P Insurance operates on a risk-sharing model, allowing individuals with common interests to form communities to protect against losses collectively. As per the Consultation Paper, P2P insurance means a financial business activity whereby a P2P insurance service provider provides P2P insurance services through a P2P insurance platform. Therefore, P2P insurance contracts are not deemed to be insurance policies as defined under the Insurance Act. It is also being proposed that the annual amount of P2P insurance contributions under a P2P insurance contract should not exceed MUR 100,000 (circa USD 2,300) unless otherwise approved by the FSC. The other salient requirements for a P2P insurance service provider are listed below:
- It should have a board of directors comprising at least 3 persons provided that at least 30% of the board are independent directors and that there is at least 1 resident director
- It should employ adequate staff in Mauritius who are fit and proper and can demonstrate relevant experience and competence
- It should have at least 1 full-time officer, with at least 5 years’ relevant experience and who understand the business and operations of a P2P insurance service provider
- The pricing of the service provider should be certified by an actuary to ensure reasonableness
- It should be ensured that the insurance pool is segregated and kept separately from the service provider’s proprietary funds
- It should have a proper risk management framework in place
- It should have adequate and resilient IT and cybersecurity infrastructure in place
- It should adhere to the AML/CFT requirements of Mauritius and have proper measures in place to counter money laundering offences
- It should publish its annual audited financial statements and unaudited financial statements on its website
The introduction of this new P2P insurance framework aims to invigorate the insurance sector by enabling the establishment of new and innovative operators that leverage this model.
Click here to access full communique issued by the FSC
Stay tuned for our newsletter that will be released once the P2P Insurance framework is legislated!