Yemisi Izuora
The National Insurance Commission (NAICOM) is taking pro-active measures to address ostensible industry gaps so as to maintain tab with global trends and market dynamics.
The commission will take such steps in the area of solvency framework, accounting and auditing practices, company viability and enforcement of compulsory which are considered key to sector growth.
Also NAICOM would take steps to strengthen long term investment instruments for annuities, consumer protection and industry tax challenges.
This it explained is prompted by on-going regulatory changes in the global insurance market, which is re-shaping the insurance industry and creating strategic and operational challenges and opportunities for insurers.
According to the Director, Inspectorate Division of NAICOM, Mr Barineka Thompson the global financial crisis of 2008–09 and the $184 billion US Government bailout of the insurance giant AIG, led to call to regulate the global insurance industry and the globe’s biggest banks.
Thompson pointed out that the development prompted countries to review their insurance market regulatory functions, adding that a country like India is shifting from a regime based on Solvency I to Solvency II.
America is also effecting significant reforms in its insurance market in the area of solvency, accounting, corporate governance, and consumer protection, he said.
He informed that the US is approaching its 2nd IMF assessment, exploring changes to its capital standards and group supervision options. Europe in January 1, 2016 is commencing the implementation of solvency 11 . Insurers are expected to meet all directive requirements, subject to application of transitional measures, and risk enforcement action in cases of breach.
Speaking further he said that the Middle East is making some significant changes to align regulation with international practices with focus on local issues and Shari’a compliant insurance products like Takaful.
He said South Africa has continued to move forward with its Solvency Assessment and Management framework (SAM) to become effective 2016, but in Nigeria focus is in the areas of deepening insurance penetration, strengthening insurance institutions through effective regulatory framework ,improving communication with all stakeholders to ensure transparency, public trust and confidence.
He listed other areas of focus by NAICOM to include transforming the commission’s processes, people and systems, and optimising revenue collection and effective management of assets.
He said NAICOM’s regulatory and supervisory practices were subjected to an IMF/World FSAP review in 2013, adding that the commission’s initiative since then had been on-going transition to Risk-based Supervision.
Others are: enhancement of solvency management framework including consideration of Solvency II equivalence and early warning system. Review and consolidation of insurance laws, adoption of uniform financial reporting template for insurance reporting and consolidation of guidelines issued by the commission.