Ghana’s insurance industry is regulated under the Insurance Act, 2021 (Act 1061) (the Insurance Act). The National Insurance Commission (the NIC) is responsible for the effective supervision and regulation of the insurance industry in Ghana. The Insurance Act defines a foreign insurer as a person who carries on an insurance business and is incorporated outside Ghana. It also defines a foreign reinsurer as a person incorporated outside Ghana with the primary business of entering reinsurance contracts as a reinsurer.
The Insurance Act regulates any insurance business carried out in Ghana by foreign insurers and reinsurers. A person is considered to carry on an insurance business in Ghana if that person (as an insurer or reinsurer): (i) enters into a restricted insurance contract (any insurance policy which covers risks arising from properties located in Ghana, liabilities arising in Ghana, or goods being imported into Ghana); (ii) occupies any premises in Ghana with a view to undertake an insurance business; or (iii) makes an offer to (or invites) a person resident in Ghana to enter into, renew or vary an insurance contract. On the other hand, a person purports to carry on an insurance business in Ghana where such a person uses a name, style, designation, description, title or trade or service mark that represents or implies that the person is an insurer or a reinsurer.
Life insurance does not fall within the scope of a restricted insurance contract. Therefore, a foreign insurer or reinsurer may underwrite or issue life insurance policies for the benefit of Ghanaian residents without being considered to be carrying on an insurance business in Ghana provided the life insurance policies are not marketed, sold or distributed in Ghana by the foreign insurer or reinsurer. A foreign insurer or reinsurer may sell life insurance products to Ghanaian residents on a reverse solicitation basis.
A person who carries on or purports to carry on an insurance business in Ghana requires an insurance licence from the NIC. Failure to obtain the required licence constitutes a crime and is punishable by a maximum fine of GHS 600,000 (USD 50,000) or a maximum term of 5 years imprisonment. However, there are a few exceptions to the requirement for a licence in respect of foreign insurers and reinsurers under the Insurance Act.
The licensing requirement does not apply to a foreign reinsurer that enters into: (i) a reinsurance contract with a licensed insurer; or (ii) a retrocession contract (an insurance contract under which a reinsurer indemnifies another reinsurer against any loss on one or more reinsurance contracts entered into by the other reinsurer) with a licensed reinsurer. It is also not applicable to a foreign reinsurer that opens a contact office in Ghana provided the contact office is approved by the NIC on an application by the foreign reinsurer and such contact office is operated in accordance with any directives and conditions imposed by the NIC.
Additionally, the licensing requirement does not apply to a foreign insurer that carries on an insurance business in relation to restricted and specified types of insurance contracts under an authorisation granted by the NIC. The application for authorisation is to be made by the foreign insurer through a licensed insurer or reinsurer. The authorisation is granted at the discretion of the NIC provided there is insufficient capacity in Ghana to insure the risk and no licensed insurer is willing to insure the risk covered under the insurance contract. Furthermore, the foreign insurer must sufficiently prove that: (i) it is authorised in its home country to enter into an insurance contract of the type for which the authorisation is sought; (ii) it has satisfied the regulatory and supervisory requirements of its home country concerning the insurance business to be carried out under the authorisation; and (iii) the insurance contract would be considered as lawfully entered into by the foreign insurer if entered into in its home country.