4.5 Insurance Climate 4.5.1 Legal environment The insurance industry in Ghana is governed by the Insurance Act, 2006 (Act 724). Act 724 complies with the International Association of Insurance Supervisors (IAIS) Core Principles and gives better regulatory powers to the National Insurance Commission (NIC). The Act among other things prohibits composite companies, therefore, insurance companies have to separate their life and non-life operations into different companies. 4.5.2 Accounting manual for the insurance industry The NIC in collaboration with the Institute of Chartered Accountants, Ghana (ICAGhana), had developed an accounting manual for the insurance industry. The manual is in compliance with the requirements of the International Financial Reporting Standards (IFRS). The main objective of the accounting manual is to ensure that all insurance companies prepare their financial statements in accordance with the requirements of the IFRS. 4.5.3 Third-party Motor Insurance Injury In response to outcries by motor underwriting companies regarding the escalating nature of injury and deceased motor insurance claims especially awarded by the courts, the NIC has inaugurated an industry committee to work out a formula for computing third-party motor insurance injury and deceased claims for the Ghanaian insurance market. 4.5.4 New Capital Requirement All insurance companies are mandated to comply with a new minimum capital requirement of USD5 million by December 2012. This increase of the capital requirement from USD 1 million to USD5 million is to help insurance firms position themselves to underwrite much bigger risks. 4.6 Taxes Sixth Annual APRM Progress Report: January – December 2011 75