By Ebere Nwoji
The insurance industry may be heading to tougher times in terms of regulation as the National Insurance Commission (NAICOM) has vowed to ensure full implementation of recommendations and guidelines stipulated by the World Bank on supervision of insurance institutions.
The commission, which early this year sent signal to the industry operators on its plans to implement the Risk Based Supervision model, Tuesday in Abuja informed the operators that in exercise of the powers conferred on it by section 49 of the insurance act of 1997,it has released what it termed Market Conduct and Business Practice Guidelines for all insurance institutions in Nigeria.
The commission also released another document tagged: 'Prudential Guidelines for Insurers and Reinsurers in Nigeria'.
Brandishing to the insurers the 78 page market conduct and Business guidelines for insurers at the mega insurance conference at Transcorp Hilton Abuja, Deputy Commissioner for Insurance, Finance and Admin Mr. George Onakhene said the document contained frame work for fair policies and procedures,effective claims management, trade practices and fair treatment of customers.
According to him, it also contains operations, pricing , commissions and associated returns as well as foreign facultative reinsurance placements for reinsurance brokers.
The 62 page prudential guidelines for insurers and reinsurers, the deputy commissioner added, sets out the minimum prudential standards for underwriting reinsurance, investments, reserving, outsourcing among other activities required from insurance institutions with a frame work for the establishment of policies and procedures for internal controls.
Onakhene urged the insurers to endeavour to put their houses in order to survive in the face of the guidelines.
He said the guideline is part of transition to Risk Based supervision, which he said is not as easy as the operators may think.
He advised the umbrella body of insurance underwriters, the Nigerian Insurers Association (NIA) to appoint a committee that will work with the commission in the implementation of .the new model .
"The risk based supervision may not be as easy as you think because there are some small companies that are carrying heavy risks and there are some big companies carrying smaller risks so each company will be judged by the weight of risk it is carrying", Onakhena explained.
He said NAICOM is not in any way interested in punishing operating firms or in penalising them through imposition of fines adding that the new supervision model would witness increase in shareholders' activities in the various companies they invested in.
He also said NAICOM in implementing the guidelines under the model might consider implementing the aspect of the insurance law which requires that employee who through his conduct brings penalty fine to his company would pay for such fine.
Onakhene said the overall essence of the regulations is for operators to behave professionally, attract more businesses to their companies and contribute meaningfully to the National economy.
No comments:
Post a Comment