National Insurance Commission (NAICOM) says its regulatory and supervisory priorities for insurance industry in 2017 will focus on customer protection and market stability, and draws operators’ attention to the need to be prepared to comply where necessary.
One of the key focus of the commission in the new year is the re-launch of the Market Development and Restructuring Initiative (MDRI) with special and intensified implementation efforts on enforcement of compulsory insurance, diversification of distribution channels, increase in access points for insurance services, micro insurance, takaful, improvement in data collection and promotion of financial literacy.
In a statement released by the Commission on Monday, NAICOM said it was going to carry out capital verification exercise in 2017.
“In order to ensure protection of policyholders and beneficiaries of insurance contracts against unexpected losses of insurance companies, the Commission will undertake a verification of the capital resources of all insurance companies in the first quarter of 2017. The cost of this exercise will be borne by the companies (the modalities shall be communicated in due course),” according to the statement.
NAICOM also noted that this would entail a verification of the assets and liabilities of all insurance companies. “In preparation for this, boards are advised to ensure fairness in valuation of assets and liabilities of their companies when presenting the financial statements for the year ending 31 December, 2016.
“All professionals that participate in the financial reporting supply chain are expected to ensure their duties in valuation of assets and liabilities, and issuance of opinion on financial reports are discharged creditably in accordance with relevant laws and professional standards,” it stated.
Other areas to be looked into by the commission this year include management expenses of insurance companies; statutory returns submission and compliance; risk based supervision road map, which will be issued by the end of January 2017.
The final road map for the industry’s transition to risk base supervision, according to NAICOM, will be issued by the end of January 2017.
“As indicated in the draft exposed last year, the commission already has components of a risk based solvency regime in place which will only be improved upon in the light of changes made in regulatory standards after they had been introduced and the operating context of the Nigerian Insurance Industry.”
NAICOM also listed other areas of focus to include information technology; competence of directors, senior management and persons in control functions; corporate governance, and service delivery by the commission.