Mozambique: Comprehensive Reform of the Insurance Legal Framework

Law No. 4/2026 extinguished the former Instituto de Supervisão de Seguros de Moçambique, IP (ISSM) and established the Autoridade de Supervisão de Seguros e de Fundos de Pensões de Moçambique (ASFPM), a state body with legal personality and administrative, financial and patrimonial autonomy. The ASFPM succeeded the ISSM on 21 April 2026, retaining all rights and obligations previously held by the latter.
The ASFPM’s mandate extends beyond the former ISSM: in addition to licensing, supervising, regulating and sanctioning insurance activity and its mediation, it is also responsible for the prudential supervision of pension fund management entities and their funds. It is governed by a Board of Directors (3 to 5 executive members, five-year terms renewable once), a Supervisory Board and an Advisory Board that includes representatives from the Banco de Moçambique, industry associations and consumer protection bodies.
The ASFPM is required to cooperate with the Banco de Moçambique to ensure coherence of financial system regulation and supervision, as well as with national and international institutions on anti-money laundering and counter-terrorism financing matters. All references to the ISSM in existing legislation, regulations, administrative acts and contracts are deemed to refer to the ASFPM.

The new regime sets updated minimum share capital thresholds for insurance and reinsurance companies:

• MZN 45 million for insurance or reinsurance companies operating exclusively in the Health or Assistance branches;
• MZN 97 million for insurance or reinsurance companies operating in two or more of those branches or in any other non-Life branch;
• MZN 196 million for life insurers; and
• MZN 295 million for insurance or reinsurance companies operating cumulatively in the Life and non-Life branches.

At least 50% of the minimum share capital must be paid up in cash at incorporation, with the remainder due within 180 days. The minimum share capital for insurance brokerage firms has been set at MZN 1.1 million (insurance brokers) and MZN 1.5 million (reinsurance brokers). Changes to share capital require prior authorisation from the ASFPM.

The new regime introduces detailed corporate governance requirements representing a significant enhancement compared to the previous framework. Insurers must adopt an effective governance system ensuring sound and prudent management, including:

• Fit and proper requirements for members of governing bodies and key persons (responsible actuaries, internal auditors, risk managers, compliance officers and claims managers);
• An effective risk management system comprising strategies, processes and reporting procedures for identifying, measuring, monitoring, managing and communicating risks, including an internal fraud prevention policy;
• An autonomous compliance function and effective internal control system;
• An effective actuarial function performed by certified professionals;
• An internal audit function, with annual accounts subject to external audit by a firm established in Mozambique; and
• A supervisory body composed of independent members with no direct management involvement.

Insurance mediators are no longer authorised to collect insurance premiums – a significant change from the previous framework, under which mediators could collect premiums on behalf of insurers. Mediators previously authorised to collect premiums have a three-month transitional period to adapt their electronic collection systems.
The categories of insurance mediators have been reduced to two: brokers, covering insurance and reinsurance brokerage, and insurance agents. Insurance agents operating as commercial companies that are currently authorised have a maximum of three years to transition into the broker category, failing which their authorisation will be revoked.

The new regime introduces several mechanisms to strengthen policyholder protection:

• Customer Ombudsman (Provedor do Cliente): each insurer and reinsurer must appoint an individual of recognised standing, qualifications, fitness and independence, to whom policyholders, insured persons, beneficiaries and injured third parties may submit complaints not resolved through the insurer’s internal process. The Ombudsman may issue recommendations, and their activity is monitored by the ASFPM.
• Complaints management function: an autonomous function staffed by qualified persons responsible for handling complaints.
• Internal customer service policy: covering information and disclosure duties and preventing the marketing of products unsuitable for the relevant customer profile.
• Prohibition of unfair terms: the regime expressly prohibits leonine clauses and discriminatory practices, including discrimination on grounds of disability.

The ASFPM may prohibit the marketing of products unsuitable for the customer’s profile or that manifestly contribute to conflicts of interest.

The new regime expressly prohibits fronting operations. As regards reinsurance ceded abroad, the foreign reinsurer must: (a) hold a rating from a rating agency equal to or above a minimum threshold to be set by regulation; and (b) have been incorporated and operating in its home country for at least five years.
The ASFPM sets retention limits by regulation and may impose restrictions on risk cession operations, including intra-group transactions. Insurers must submit their annual reinsurance treaties to the ASFPM. The prohibition on contracting insurance covering risks in Mozambique with foreign insurers not established in the country is maintained, with a limited exception procedure through the ASFPM.

The new regime introduces a detailed framework for the law applicable to insurance and reinsurance contracts. Parties may choose the applicable law, provided that the choice corresponds to a serious interest of the parties or is connected with an element of the contract relevant to private international law. In the absence of choice, the contract is governed by the law of the State with the closest connection – presumed to be the State where the risk is situated (for non-life) or the policyholder’s habitual residence or relevant establishment (for life insurance). Mandatory insurance contracts are governed by Mozambican law.

The new regime introduces a graduated sanctions framework:

• Simple contraventions: fines of 100 to 250 minimum wages for the financial sector (individuals) or 250 to 500 (legal persons);
• Serious contraventions: fines of 250 to 500 (individuals) or 500 to 1,500 (legal persons);
• Especially serious contraventions: fines of 800 to 2,500 (individuals) or 2,500 to 5,000 (legal persons).

Criminal offences include illegal exercise of insurance activity (imprisonment up to three years plus fines). Ancillary sanctions include seizure of economic benefit, temporary prohibition from holding management positions in the financial sector, prohibition on entering into new insurance contracts, suspension of voting rights and publication of the final sanction, where imposed. The statute of limitations for contravention proceedings is five years.

• Entry into force of the new Insurance Legal Regime: 28 October 2026 (90 days from publication).
• Implementing regulations: to be adopted within 90 days of publication.
• Mediators’ adaptation to electronic premium collection systems: three months from entry into force.
• Transition of insurance agents (operating as companies) to the broker category: three years from entry into force.

Insurers currently authorised to operate cumulatively in Life and non-Life branches may continue to do so, provided they meet the new minimum share capital requirements, maintain separate accounts and adequate solvency margins.

The new regime introduces the concept of sovereign insurance (seguro soberano) for extreme-magnitude non-Life risks arising from abnormal events (e.g. natural disasters with significant economic and social impact). Contracting sovereign insurance requires Government authorisation upon proposal from the Minister of Finance. Micro-insurance activity is expressly maintained within the scope of the new regime and is subject to specific implementing regulations.