NIA set for risk-based supervision regime

The Nigerian Insurers Association (NIA) has stressed the need for its members to be equipped for the much anticipated Risk-Based Supervision (RBS) regime, which would take off soon at due time.

This was disclosed at a one-day workshop organised by the body in Lagos, where the Chairman, Eddie Efekoha, said the programme was designed to address some of the key issues that will help improve the operators’ understanding of the (RBS).

Efekoha was quoted in a statement as commending the National Insurance Commission (NAICOM) for its consultations and engagement aimed at building consensus among insurance players.

The chairman said Risk-Based Supervision is gradually becoming the dominant approach to regulatory supervision of financial institutions around the world, adding that it is a comprehensive, formally structured system that assesses risks within the financial system, and giving priority to the resolution of those risks.

He said: “I want to thank Alexander Forbes for coming to our assistance at this critical time, and do hope that they will leave here highly fulfilled that they have contributed to the development of the Nigerian insurance market. Most importantly, for the enhancement of the skills and competencies of our members in the area of Risk based supervision and by extension, risk based capital.

“Risk-Based Supervision (RBS) is gradually becoming the dominant approach to regulatory supervision of financial institutions around the world. It is a comprehensive, formally structured system that assesses risks within the financial system, giving priority to the resolution of those risks.
Often contrasted with rules-based regulation, it is also known as principles or compliance-based supervision; a method of regulation which involves checking for and enforcing compliance with rules – legislation, regulations or policies – that apply to an entity.

“RBS has a regulatory emphasis of “focusing on what matters” – assessing the degree of risk in the company’s business operations and determining how to reduce the risk as required,” he said.