Insurance companies in the country must prioritise robust capitalisation for financial stability, says the National Insurance Commission (NAICOM).
The commissioner for Insurance/CEO of NAICOM, Olusegun Omosehin, who stated this at the 2024 Insurance Directors’ Conference organised by the College of Insurance and Financial Management (CIFM) in partnership with the commission, in Lagos recently, stated that, the financial stability and soundness of insurance institutions are now more vital than ever. Hence, to remain relevant and competitive, he said, insurance institutions must comply with all the relevant prudential regulations and requirements.
To effectively tap into target markets and navigate current industry realities. he said, the commission is preparing various entities well ahead of the Risk-based Capital regime, adding that , “so ensuring adequate capitalisation is no longer optional. We must prioritise robust capitalisation to effectively tap into target markets and navigate current industry realities.”
The commission, in the last one and half years, he said, has successfully examined a few of underwriting firms using the Risk Based Supervision Approach, even though the exercise has not been fully completed. “However, we are using this medium to seek your cooperation as Directors of those institutions and demand compliance on issues that have been raised and directed to the various Boards, for attention,” he disclosed.
He called on directors and policymakers across insurance institutions to develop and implement policies that promote adherence to good governance, effective risk management and compliance principles, stating that NAICOM’s goal is to ensure sustainability, securing the long-term viability and future resilience of insurance entities.
Stating that the commission’s primary focus is to ensure timely payment of genuine claims, Omosehin said, it expects all insurers to significantly reduce their outstanding claims by the end of the year.
Unnecessary delays in the settlement of genuine claims, he said, will no longer be tolerated, adding that, “as a Commission, we are committed to strictly enforcing the law and taking swift action against any insurer failing to meet their claim obligations. Simply put, if a company cannot honor legitimate claims, it has no place in our industry.”
