Insurers get one-month to make contributions on RBS guidelines
Insurance operators have been given one month to make contribution on the draft guidelines for Risk Based Supervision(RBS) being planned by the National Insurance Commission(NAICOM). The draft road map of the industry’s risk base supervision has been exposed to the industry by the industry regulator for inputs before the final guidelines which will be released next year.
The draft was unveiled by the Commissioner for Insurance, Mohammed Kari, at the Insurers Committee meeting in Lagos, which document he said would enable operators undertake risks based on their their financial capability.
Meanwhile, the insurers Committee has also extended commencement of its rebranding project to next year to enable members sort themselves out with current economic realities, while necessary arrangements would be completed for its eventual take off.
According to Kari, the RBS would lead to consolidation in the industry. He noted that consolidation is inevitable, stressing that there are many players in the industry who do not add value to the services they provide. He maintained that the exercise would change such attitude and position operators for effective competition
“Consolidation does not mean just an additional capital. It could be redefining and identifying the type of insurance business you want to operate. For example, you do not have as much capital as company B, you would operate within the confines of your capital. Today, we have capital as the only bases for operation and if you meet the minimum capital you can operate.
“Our legislation had structured the industry into life, general and miscellaneous. So, if you are licenced to do general, it means that with N3 billion you can attempt to insure petroleum refinery or you can claim the right to insure an Airline, which is not right if you look at the foundation of insurance.
“This is because, to be able to hold a risk, you must have enough asset base to cover the risk. So, risk based is being able to identify what is your financial capability. If you financial capability does not guarantee you to insure oil refinery or airline, you would not be allowed to do so.
“Your financial ability may be to insure a Keke NAPEP, then you would be a specialist in Keke NAPEP insurance. That is what risk based is going to be. It is going to first of all require that we review and see whether the minimum capital requirement is adequate. If it is not, we would require additional capital to meet that minimum. But if it is okay, we would just require the classification of companies’ assets plus the extra needed to get into the class of business one wants to undertake,” he said.
Briefing journalists today, after the Insurers Committee meeting in Lagos, the Head Corporate Affairs, National Insurance Commission (NAICOM) ‘Rasaaq ‘Salami; said the rebranding project would kickstarts in first quarter 2017. He noted that by them, all necessary requirements to make the project successful would have been put in place.
Insurers have adopted the rebranding initiative as a vehicle to transform their business. They resolved to propel the multi-million rebranding campaign through radio and social media channels.
The Chairman Sub Committee on Publicity and Communication of the Insurers Committee, Hassan Oye- Odukale, said the committee has adopted the proposal submitted by its consultant, stressing that the initiative would be reviewed quarterly to access the performance.
The Vice Chairman Sub Committee Publicity of the Insurers Committee, Ebelechukwu Nwachuku, said getting the youths to embrace insurance is the core mandate of the campaign, adding that operators hope to take the campaign to schools to enable them educates pupils on the need for insurance.
She also noted that the operators are eying the highly mobile individuals who need insurance to secure their future.
She posited that in line with the campaign, the operators have also resolved to improve on their service delivery, adding that the body has decided to pull resources together to pursue a robust and well coordinated awareness campaign.
Nwachukwu, maintained that all necessary channels would be used to drive the campaign, adding that the youth market remains a veritable haven for insurance growth.
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