COTE D’IVOIRE Law and Practice Contributed by: Assemian Kouakou, Innocent Kouakou, Francky Lukanda and Lamine N’Diaye, Ofori Conseils Africa LLP
7. Alternative Risk Transfer (ART) 7.1 ART Transactions In Côte d’Ivoire, alternative risk transfer (ART) transac- tions, such as insurance-linked securities or industrial loss guarantee contracts, are still under-developed. Local insurance companies can theoretically use them, but these instruments are not yet fully integrated into market practice. Regulators in the CIMA zone only recognise instruments that comply with the general conditions of the Insurance Code and can be classi- fied as insurance or reinsurance; to date, no specific framework for ARTs has been formalised, and their implementation may therefore encounter regulatory difficulties, particularly in terms of solvency, govern- ance and accounting recognition. In practice, any ART project requires prior approval from the supervisory authorities and appropriate structuring to ensure com- pliance with the CIMA regime. 7.2 Foreign ART Transactions Alternative risk transfer (ART) transactions concluded abroad are not automatically recognised as reinsur- ance contracts in Côte d’Ivoire. To be considered within the CIMA regulatory framework, they must comply with the conditions of the Insurance Code and be submitted to the local authorities, in particular for solvency assessment. Otherwise, these transactions are treated as market transactions or external finan- cial instruments and their legal and prudential recog- nition may be limited, requiring prior approval for any impact on the accounting or capital requirements of local insurers. 8. Interpreting an Insurance Contract 8.1 Interpretation of Insurance Contracts and Use of Extraneous Evidence Insurance contracts are in principle governed by the same general rules of the Code of Obligations (Civil Code) as other contracts, but the CIMA Code provides for certain specific rules to protect the parties, in par- ticular the insured. Consumer contracts benefit from enhanced protection and are interpreted strictly in favour of the insured. When interpreting contracts, the courts may admit ancillary or superfluous evidence, such as negotiations, the circumstances of the sub-
scription, customary market practices or the common understanding of the terms, to clarify the intention of the parties and ensure that the contract is interpreted in accordance with its purpose. It should also be noted that, in accordance with Arti- cle 49 of the CIMA Treaty, the Council of Ministers may interpret CIMA regulations, and its decisions are binding on all national authorities to ensure uniform application of the CIMA Code, regardless of the inter- pretation of insurance contracts. 8.2 Warranties In insurance contracts governed by the CIMA Code, warranties specify the risks covered, their duration and the amount insured, and must be clearly stated in the policy, with visibility for exclusions, nullities or forfeitures in accordance with the provisions of Arti- cle 8 of the CIMA Code relating to insurance contract terms. They receive special attention compared to other clauses, as they determine the scope of cover- age and the main obligations of the parties. They are part of the mandatory contractual terms and are sub- ject to mandatory provisions. Breach of a guarantee may result, depending on the case, in a reduction or refusal of compensation, termination of the contract or the invocation of contractual liability, in accordance with the provisions of the Insurance Code and the general principles of contract law. 8.3 Conditions Precedent In insurance contracts governed by the CIMA Code, the preconditions for the insurer’s liability, such as payment of the premium, accurate declaration of the risk or notification of an aggravation, must be clear- ly stated in the contract, even if they do not require specific wording. Based on the provisions of Articles 12, 18 and 19 of the CIMA Code, their breach by the insured may result in forfeiture of cover, reduction of compensation, termination or nullity of the contract, while non-compliance by the insurer may expose the latter to termination of the contract and a two-year limitation period for actions.
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