By Rosemary Onuoha
The National Insurance Commission, NAICOM, has said that a sound regulatory and supervisory system is necessary for maintaining a fair, safe and stable insurance sector for the benefit and or protection of the interests of stakeholders.
Deputy Commissioner for Insurance, (Technical), Mr. Mohammed Kari, who stated this, said that just as the financial system has evolved, so too has the supervisory framework which will also promote stability of the financial system.
Kari said that NAICOM is saddled with the responsibilities of ensuring effective administration, supervision, regulation and control of insurance business in Nigeria as provided in Part II, Section 6 of National Insurance Commission Act of 1997.
According to him, where operators lacked the vision to see impending crisis, regulators have come in to save the day.
“In various jurisdictions; especially the developing economies with weak operators; the regulator, performing his statutory function has been tagged as overbearing and a spoil sport by these uninformed observers, for constantly introducing checks and balances in the management of insurance institutions. Ironically more often than not most regulatory measures are introduced to protect the policyholders,” Kari said.
On the level of progress made on Risked Based Supervision, RBS, Kari said that, RBS Roadmap to guide implementation has been developed; Risk Based Supervision Implementation Committee (RIBSIC) was constituted; enhancement of Solvency Management Framework including consideration of Solvency II equivalence and early warning system; on-going consolidation of all guidelines issued by the Commission; setting up group-wide and consolidated supervision structures; as well as training and capacity development of staff of the Commission and the market operators on an on-going basis.
While NAICOM is making all efforts to build the appropriate expertise to ensure that success is achieved, Kari said that the market is also expected to sit up and build up internal proficiencies and structures that would make the implementation seamless.
Kari said that going forward, the spirit enshrined in the principles laid down in the Solvency II framework shall guide the sector and focus shall be placed on insurance companies risk management practices and model; effective compliance function; regulatory reporting and compliance; training on an on-going basis; as well as collaboration.
“The market association shall be required to participate actively in the implementation process and make contribution through Industry Working Groups (IWGs) as recommended in the RBS Roadmap. We need to once more emphasis the need for market collaboration as we go forward, these changes cannot be surmounted by operators individually, resources, studies and experience need to be shared,” Kari said.