Regulatory guidance for implementation of Finance Act 2021 coming soon – NAICOM


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Chuks Udo Okonta

The National Insurance Commission (NAICOM) said it has studied the provisions of the Finance Act 2021 as to the issue of capital requirement and had drafted regulatory guidance which would be issued this year for implementation.

The Deputy Commissioner, Technical, NAICOM, Sabiu Abubakar, who disclosed this at a forum recently in Lagos, also submitted that NAICOM would this month – August, commenced a pilot Risk Based Supervision (RBS) examination in eight insurance companies, stressing that the Commission, did a pilot RBS examination in 2021 with seven companies and that the outcomes have been sent to the companies involved.

“Eight companies have been scheduled for the 2nd half year of 2022 RBS commencing in August,” he posited.

He maintained that NAICOM has started training its Staff on Risk-Based Capital
(RBC) in collaboration with FSD, Africa, stressing that the insurance operators are expected to carry out capacity building of their Staff on RBC as the involvement of the operators on the RBC framework is very demanding in terms of human technical capacity and other resources.

Abubakar maintained that hopefully, full implementation of RBC would start in 2023 or 2024.

Still on developing and sanitising the industry, the Governing Board of NAICOM, said it is poised to revisit the insurance industry recapitalisation, whilst seeking the support of the Federal Government to effect major restructuring of the sector and eliminate non-performing companies.

The Board Chairman, Dr. Abubakar Sani, said there is already a set plan to carry out specific exercises aimed at sanitizing the insurance industry in the country, stressing that enforcement of the code of ethics for companies in the sector is underway.

“We shall enforce the professional code of ethics among the insurance entities, and strengthen their corporate governance which the Board believes will sanitize the market.

”The NAICOM Board will in due course revisit the matter of recapitalization of the insurance industry and will clean up its act with the enforcement of code of ethics of insurance profession and practice, and code of good corporate governance in companies. The board is working to sanitize the market and will be taking out companies that are not measuring up to expectations,” he said.

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