The National Insurance Commission recently released another five-year road map for the development of the industry. To be implemented from 2016 to 2020, the policy guide is a follow-up to the first development plan rolled out in 2011 and the aim is to consolidate the developments so far achieved.
NAICOM, it stated, planned to achieve the completion of ongoing regulatory reforms; collaborate with all stakeholders in the implementation of the resolutions reached at the 2014 insurance summit; adopt the best practice and international supervision standards; as well as lessons learnt from other markets and industry reforms.
The main goals were deepening insurance penetration; strengthening insurance institutions through effective regulatory framework; improving communication with all stakeholders to ensure transparency, public trust and confidence.
The other objectives it set to achieve are to transform the commission’s processes, people and systems, and optimise revenue collection and ensure an effective management of assets.
Already, NAICOM said it had commenced an action to address identified gaps in the area of solvency framework, accounting and auditing practices in the industry, the viability of insurance companies, the enforcement of compulsory insurance, long-term investment instruments for annuities, consumer protection and industry tax challenges.
It listed some of the ongoing initiatives the as issuance of licences to applicants for micro-insurance and takaful insurance; the development of regulatory capacity on micro-insurance, takaful and risk-based supervision; the ring-fencing of assets covering policyholders’ funds; the review of investment guidelines to facilitate allocation of insurance and shareholders’ funds to infrastructure and mortgages, as well as the issuance of market conduct guidelines.
NAICOM’s Inspectorate Director, Mr. Barineka Thompson, said the new development plan was to fundamentally re-shape the insurance industry, create strategic and operational challenges and opportunities for insurers.
He said NAICOM’s role was to facilitate the orderly conduct of insurance business through appropriate regulation. Thompson said it had also facilitated the ongoing transition to risk-based supervision, enhancement of solvency management framework including the consideration of solvency II equivalence and early warning system.
With this development plan, the insurance sector, if fully implemented the plan, should increase its contribution to the gross domestic product (GDP) of the national economy.
The present less than one per cent contribution t the GDP is not accepted by all levels of the society from the government to the practitioners and the people. South Africa has 15 per cent insurance penetration with Morrocco having more than three per cent. For Nigeria which not only has the highest largest economy in Africa but also largest market to contribute less than one per cent to the GDP will not work in the interest of the country in reaching its aim of becoming of the first twenty economies in the world by Year 2020.
The Coordinating Minister of the Economy and Minister of Finance, Dr. (Mrs) Ngozi Okonjo-Iweala has told the insurance industry that government expects more from them and that government will do all in her strength to ensure that the insurance industry in Nigeria perform better.
Expectedly, NAICOM should address challenges facing the industry and as Mr. Daniel promised that the commission is addressing two biggest challenges of trust and awareness confronting the sector, all efforts must be put together to ensure the growth of the Nigerian insurance industry.