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Chuks Udo Okonta
The Governing Council of the Nigerian Insurers Association (NIA) has set up a Committee to study the Draft Guidelines for
Risk-Based Supervision (RBS) issued by the National Insurance Commission (NAICOM).
The Chairman of the NIA, Eddie Efekoha, who disclosed this in Lagos, said the committee would also advise the Association appropriately, stressing that the Association is also studying RBS road map implementation in other Jurisdictions so as to be properly guided and be able to contribute meaningfully.
He noted that the NIA has held a workshop conducted by Alexander Forbes, South Africa to prepare members for the implementation.
“Risk-Based Supervision (RBS) is gradually becoming the dominant approach to regulatory supervision of financial institutions around the world. It is a comprehensive, formally structured system that assesses risks within the financial system, giving priority to the resolution of those risks.
“Often contrasted with rules-based regulation, it is also known as principles or compliance-based supervision; a method of regulation which involves checking for and enforcing compliance with rules – legislation, regulations or policies – that apply to an entity.
“RBS has a regulatory emphasis of “focusing on what matters” – assessing the degree of risk in the company’s business operations and determining how to reduce the risk as required,” he said.
Efekoha posited that with RBS, entities are always being monitored, both for compliance with the rules and for how they approach risk management.