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Chuks Udo Okonta
The National Insurance Commission (NAICOM) says it could not issue the final road map for the Industry’s transition to Risk Based Supervision (RBS) by end of January because it is still considering the inputs from insurers.
NAICOM in its regulatory priorities for 2017, said the final road map for the Industry’s transition to Risk Based Supervision (incorporating all the suggestions made by the Nigerian Insurers Association), will be issued by the end of January 2017.
The regulator noted that as indicated in the draft exposed last year, it already has components of a risk based solvency regime in place which will only be improved upon in the light of changes made in regulatory standards after they had been introduced and the operating context of the Nigerian Insurance Industry.
Inspenonline gathered that NAICOM hopes to deliberate and fine tune contributions made by insurers into the draft at the proposed Insurers Committee Retreat, before releasing the final road map.
“While it is acknowledged that some time will be required to install a full-fledged risk based solvency regime for the industry, the reality does not preclude the operators from paying attention to the risk to which they are exposed to, as a result of their Underwriting, Operational choices, and relevant drivers in the business environment,” NAICOM said.
The Commission said it has noted that some Boards of Directors do not give adequate attention to the risk exposure of their business and the adequacy of their Capital, stressing that such Companies wait until the Commission informs them of the areas of concern and deficiencies in their solvency margin.
It said the statement of compliance with Risk Management Guidelines appears to be issued without regard to the realities of the Companies concerned.
“In this regard, Boards are advised not to see risks and solvency management as just an issue for compliance but as a practice worth imbibing by prudent and effective Insurance Institutions.
“On the Commission’s part, appropriate measures and tools are to be deployed to ensure Companies that pose greater risk to the attainment of its regulatory objective receive more proactive and intensive supervision. Boards will be expected to consider the Risk Register and solvency condition of their Companies during their quarterly Board meetings,” it said.
NAICOM maintained that with effect from 2017, it expects each Company to send in report on Board’s assessment of their risk and solvency quarterly, as well as annual report on Own Risk and Solvency Assessment (ORSA), adding that all Companies are also required to have their appointed Actuaries issue a Financial Condition Report (FCR) of their Companies as at 31 December, 2016, not later than 31 March, 2017.