NIA’s Chairman, Eddie Efekoha
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Chuks Udo Okonta
The National Insurance Commission (NAICOM) has said some insurance companies have eroded their capital base and miss-matched assets and liability cover to wrong investment decisions.
Commissioner for Insurance, Mohammed Kari, disclosed this in Lagos, noted that such firms need to shore up their capital.
He maintained that the commission is committed to ensuring insurance companies hold sufficient capital to cover their risks and liabilities whenever they arise.
“We have quiet a number of companies that have either eroded capital base or have miss-matched their assets/liabilities cover, mostly arising from wrong investment decisions.
“While we are going to develop a full risk based capital framework to determine regulatory capital, we will be expecting companies to initiate the appropriate capital adequacy reviews and have their actuary report the capital needs of their business in a financial condition report. A guideline of which would be released in due course,” he said.
Kati noted that it has become necessary for all insurers and reinsurers to get used to voluntary holding capital that will protect policyholders against adverse outcomes that could negatively affect their ability to meet their obligations.