Legislation & RegulationsReminder of the legal prohibition on taking out direct insurance abroad for risks located in the Democratic Republic of Congo (DRC)

July 5, 20210

In a press release issued on 23 June 2021, the Minister of Finance reminded the public of the legal prohibition on taking out direct insurance abroad. The prohibition aims to fight against the evasion of insurance premiums which are regulated by the Insurance Regulation and Control Authority (ARCA).

Per Article 286 of Law No. 15/005 of 17 March 2015 on the Insurance Code (Insurance Code), “It is prohibited to take out direct insurance abroad for a risk concerning a person, property or liability, located on the national territory […]”.

This prohibition is formal and general and does not make provisions for any exemptions or waivers.

Despite this prohibition, certain entities required to take out insurance policies, both natural and juristic persons comprising international organizations and non-governmental organizations as well as diplomatic missions, have continued to take out direct insurance abroad for risks concerning persons, property or their liabilities located in the DRC. This constitutes an evasion of insurance premiums and a loss of revenue for the DRC.

In line with Article 445 of the Insurance Code, any insurance taken out abroad in violation of the provisions of Article 286 exposes offenders to a fine of 50% of the premiums issued abroad. In the event of a repeat offence, the fine is increased to 100% of the said premiums”.

Consequently, in order to initiate the process of compliance with the prohibition of direct insurance abroad for a risk located on the national territory, the Minister of Finance requests insurance companies concerned to submit to ARCA, in good faith, the complete list of insurance operations underwritten for the period from July 2016 to June 2021, as well as copies of contracts and insurance policies relating said operations and proof of payment. These documents must be submitted electronically to declaration@arca.cd  no later than 16 July 2021.

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