The Commissioner for Insurance (CFI), Mr Sunday Thomas, has disclosed that implementation of the Risk- Based Supervision (RBS) Insurance Policy will commence soon.
According to him, arrangements have been concluded and the policy will begin in the next two months, precisely August, this year.
The Commissioner dropped the hint at the seminar organized by the National Insurance Commission (NAICOM) for Business and Insurance Journalists with the theme: “Corporate Strategy of the Commission 2021-2023: Goals, Objectives and Deliverables,” in Lagos.
He said the relevant persons have been trained, the necessary skills acquired and the instruments that will enable implementation developed, adding that what is left is to do the finishing touches for the take-off of the policy.
RBS is a system in which the supervising authority allocates time and resources to firms based on the level of risk inherent to their balance sheet.
The supervisor is expected to assess the systemic risk that affects the industry as a whole, and then analyse the level of risk specific to each firm. It takes a holistic approach and studies the business units within the enterprise, each of which may carry varying levels of risk.
On awareness, the Commissioner called on operators to increase their budget in the area of publicity.
“We are too far behind, not much of insurance is known. The regulator will do its best but I tell you that the operators must corporate with us for all of us to be on the same page”, he said.
Thomas also disclosed the Governing Board of the National Insurance Commission (NAICOM) had on Friday, April 9, 2021, approved the commission’s 2021 – 2023 Corporate Strategic Plan.
According to him, the approval became necessary as NAICOM’s corporate strategic plan 2016 –2020 had expired.
The objectives of NAICOM’s corporate Strategic Plan among other thing include translating the Commission’s Vision, Mission and Values into actionable and measurable goals, objectives, initiatives and activities.
The plan will also provide direction for both long- and short-term decision-making by the Board for implementation by Senior Management in order to fulfil the mission of the organization as well as enable them to make strategic efforts in ensuring adequate protection of the policyholders, beneficiaries and third parties to insurance contracts and also deepen insurance market penetration.
The Strategic Plan is subject to periodic review and performance monitoring within its life span by NAICOM Board.
The Strategic Plan is rested on five pillars namely: Ensuring that public interest and policyholders are adequately protected, Entrenching effective and efficient deliverables, ensuring a safe and sound Insurance sector, Improving Trust and Encouraging innovation and promoting Insurance market development.
The Commission, in a bid to intimate the general public on its plans and activities in the next three years, had during the 2021 Seminar for Insurance Journalists in Lagos, highlighted the components and workings of the Corporate Strategic Plan.
Presenting a paper on the subject-matter at the Seminar, Head of Strategy and Special Duties, Mr Usman Jankara, gave an insight of the plan.
He stated that the strategic plan is hinged on five goals which include ensuring that public interest and policyholders are adequately protected, Entrench effective and efficient deliverables, ensuring a safe and sound Insurance sector, Improve Trust and Encouraging innovation and promote Insurance market development.
On Improving Trust and Confidence in the Nigerian insurance sector, he noted market conduct failures, ineffective complaints and grievance management, challenges with distressed insurers, and unethical practices and money laundering are all negatively impacted trust in the industry.
He, however, assured that the commission is set to institute good market conduct in the Nigerian insurance industry and ensuring a fair complaint/grievance management system.
On Facilitating Fight against Money Laundering and Terrorism Financing, he advocated for effective management of troubled institutions and improved utilization of the Security & Insurance Development Fund (SIDF).
Jankara opined that lack of understanding and awareness, fake insurance, poor market conduct and claims practices, insolvency and cumbersome liquidation processes to mention but a few expose policyholders to unsavoury experiences with insurers and assured the policyholders and the public for adequate protection.
He said the Commission is promoting improvement in a policyholders protection scheme and better utilization of the Security & Insurance Development Fund to enhance policyholders’ protection against insolvent/distressed insures.
“Enhancing enforcement of market conduct rules and monitoring degree of customers’ satisfaction, ensuring that government assets and liabilities are adequately insured are captured in the plan,” he said
On Encouraging innovation and promote Insurance market development, Jankara said that a high rate of innovative technology adoption will impact the future of the insurance industry, adding that rate based competition drive premiums down to the extent that the risk of unfulfilled contractual obligation becomes reality.
He however said the commission is facilitating innovative and competitive practices in the industry through the regulatory sandbox, service-based competition, facilitating the attainment of the National Financial Inclusion target and access to insurance through alternative distribution channels, and implementing Principles for Sustainable Insurance and facilitating regional integration of West African insurance market.
The speaker said the implementation matrix has been developed and approved, and the Corporate Strategy and Special Duties Department empowered to monitor and evaluate the progress of the plan and will periodically appraise the progress made by Departments and Units in the course of implementing the plan.
“The indices for measuring success already included under each of the Strategic Goals will provide the basis for monitoring progress and to ensuring that we are on track to successfully implement the plan,” he said.
The corporate plan, according to him, is targeted at producing safe, stable and strong insurance firms capable of competing with those of the world as well as ensuring that insurance firms are capitalised, effectively managed and properly regulated.
Other papers presented at the two-day seminar included, “NAICOM’s Digital Transformation: Progress So far” by Mr Abiodun Aribike, Head of IT; “Market Development Drives of the Commission: Actions and Prospects” by Mr Salami Rasaaq, Head, Corporate Communications; and “Claims Settlement and Complaints Handling Mechanism: Activities of the Complaints Bureau” by Mr Ahmed Adamu, Head, GCB.
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