THE LEVELS OF APPLICABILITY OF SOLVENCY II BY MOROCCAN INSURANCE COMPANIES

Ait Kassi Mustapha, Chegri Badre Eddine and Hinti Said. Department of Economics and Management Sciences, Faculty of law and Economics, University Mohammed V Rabat, Morocco. ...................................................................................................................... Manuscript Info Abstract ......................... ........................................................................ Manuscript History


ISSN: 2320-5407
Int. J. Adv. Res. 5 (9), 602-609 603 In fact, Solvency II was convieved to be principal-based rather than rule-based. It seeks to establish fair competition that is level playing field, the harmonization of principals and supervision practices, the establishment of unified European reporting.
And to establish prudential standards taking into account all risks (according to a risk-based approach and principle of proportionality PROBLEMATIC:-The prudential system of solvency II entered into force on 1 st January 2016 in Europe after long preparations to ensure the solvency of insurance companies. In the years to come, Morocco is called to setup a system of prudential insurance to reinforce the present system. What are the levels of applicability of the system of prudential solvency II by Moroccan insurance companies?

METHODOLOGY:-
In order to meet the study goals, we have adopted a quantitative approach, which consists of the development and administration of a questionnaire with target companies. The target well be primarily make up of Moroccan insurance enterprises.
The sample we treated is made 50% insurance companies in the Moroccan market. This sample meets considerations of proximity, of importance and size of the entity as well as considerations of land access.
In order to reach different insurance enterprises in Morocco, we administered the survey with structures lying at the axis of Casablanca -Rabat. Furthermore, some methodological and empirical difficulties have re-emerged namely and refusal of some officials to cooperate for reasons of confidentiality of statistical data sought by the study, in addition to the difficulty of contacting companies directly as well as the dunning of some of them many times. In fact we have used Sphinx software to develop the survey and treat the results, and to respond as effectively as possible to the objectives, we used flat sorting to brighlight the most repetitive modes in order to define the levels of applicability of solvency II within Moroccan insurance companies.
This article analyses the levels of applicability of solvency II by Moroccan insurance companies. For this purpose, the following assumptions have been set:  The present system of solvency is reliable (assumption 1).  Moroccan insurance enterprises are indirectly preparing the implementation of solvency II (assumption 2) The study addresses concerns the analysis of the levels of applicability of solvency II by Moroccan insurance companies. The goals of this study are as follows:  Check the reliability of the present system of solvency.  Analyze the elements of solvency II implementation

Results:-
The study showed lots of evidences. We try here to get the more significant results that are giving the light on particular elements linked to our hypothesis that are reliability of the system in the Moroccan market of insurance and in another side the levels of the elements compounding the solvency 2 system : Besides, the production of prudential states according to IFRS, all the work on pillar 3 is, in the majority of cases, either at a well advanced stage of implementation or is being implemented.

Diagnosis and discussion of result:-
Concerning the preparation of pillars 1 and 2 , we noted ,found the following results :  85% of the managers of insurance companies interviewed currently have an internal monitoring ant supervising service.  All the companies surveyed have an internal audit department.  Less than 90% of the companies interviewed develop risk napping  More than 55% of companies implement a business continuity plan  Only 33% of companies have a governance system  67% of companies interviewed start preparing methods of information system risk management  The adequate time period for the publication of prudential reports is more than 18 months according to 78% of surveyed companies.  According to 67% of the interviewed companies the production of prudential reports will lead to the strengthening of the management system  68% of the companies interviewed currently have computer skills to meet new reporting requirement.
In sum, the study enabled as to make major findings on the Moroccan insurance market and the degree of knowledge of solvency 2 requirements, by companies active in sector as well as the application level of a sample of the latter in the region of Rabat-Casablanca. Nowadays, it matters to strengthen the reliability of the current market and rethink the development of new tools of risk management in the sector :  Authorities must implement the application of solvency 2 according to the characteristics of insurance market by strengthening the insurance governance system.  This will oblige the implementation also of accounting reform to achieve prudential reports.  The adoption of standards model to determine the solvency capital requirement according to the characteristics of Moroccan companies.  Internal reorganizations of insurance companies, with recruitment of important IT and human investment in order to collect, check, correct process and archive technical and financial data.  The implementation of a system of management by objectives to reinforce transparency in insurance companies.  Encouragement of concentration's operation of insurance companies to satisfy capital requirement.

GENERAL CONCLUSION:-
In this article, the main purpose is to study the applicability of solvency 2 by Moroccan insurance companies, was carried out in a specific methodological framework, throughout phases that formed article , objectives and hypotheses were formed and put into practice by means of a survey, which is the key element of the field of study ,intended for Moroccan insurance companies, and this in order to achieve , in a satisfactory manner, the objectives set out and respond to the different issues that were raised.
In fact we have tried thanks to this study to shed light on the prudential solvency , in order to better assess the levels of applicability by Moroccan insurance companies , the syntheses of objectives that follow were the wish of this study 609 and that will have the ultimate goal of answering the different questions that we raised and meeting the various objectives we fixed at the beginning of this analysis . So we validated the assumptions of our research, this means the following: The present system of solvency in Morocco is quite reliable. It indicated that the majority of companies surveyed on consulted foster the development of new analytical tools of risks within then. We also made series of observations:  Lack of implementation of pillar 1, in Morocco.  The indirect application of pillar 2 and 3 of system.  Absence of a risk assessment process within many structures consulted during the empirical stage.  A large part of pillar 2 is already applied by Moroccan insurance companies.  The absence of training plan on the device of solvency 2 dedicated to directors or members the supervisory board of insurance companies.  The starting of the preparation of methods of risk management of information system by Moroccan insurance companies.  The absence of a regular assessment of the preparation of the system of prudential "solvency 2".  Moroccan companies possess computer skills to implement a reporting.
Finally, in the years to come, Morocco will implement a system of prudential solvency that takes into consideration the characteristics of Moroccan insurance companies.