Compulsory Disaster Insurance in Morocco

On 21 March 2019, Morocco adopted a Draft Decree that made it compulsory for all Moroccan citizens to subscribe natural and human-made disaster insurance.  The Decree established a Solidarity Fund against Catastrophic Events (FSEC) to cushion victims of natural disasters who would be unable to take out the compulsory disaster insurance.  The FSEC is funded by a Solidarity Tax Against Disastrous Events, which is a 1% tax paid on insurance premiums and other contributions made under insurance contracts, with the exception of life insurance contracts.  Such disaster related initiatives have been supported by World Bank’s US$ 275 million Disaster Risk Management Development Policy Loan to enhance immediate governmental access to liquidity in the event of natural disasters over a 15-year period.  The Loan Facility will support reforms designed to strengthen the financial, governance and operational frameworks of the FSEC as well as develop a list of beneficiaries to ensure timely and appropriate compensation to victims of disasters.  With the Loan Facility, Morocco would be able to upgrade its institutional framework for disaster risk management by strengthening its National Civil Protection Systems as well as, in addition, creating a National Flood Risk Management Information System.