WAICA lauds NAICOM over insurance regulatory reforms
…Urges sub-regional market to emulate
Wide range of regulatory reforms initiated by the National Insurance Commission (NAICOM) aimed at strengthening insurance institutions in the country may have excited the leadership of the West African Insurance Companies Association (WAICA) to recommend similar moves in the sub-regional market.
In fact, Ghana and Guinea has implemented the policy and is already generating increase in premium income.
At the just concluded WAICA educational conference, it noted that the reforms in the Nigerian market was remarkable and urged regulators in the sub-region to emulate the reforms in their market restructuring.
For instance, the leaders believe that the effective enforcement of regulations on premium collection and remittances “No premium, no cover” by the commission has resulted in dramatic improvement in the cash flow of insurance companies to pay claims promptly, uniformity in International Financial Reporting Standards (IFRS) accounts reporting across industry players.
For instance, immediatge past president, Waica and President of Ghana Insurers Association, Ivan Avereyireh. said the policy was a unique initiative that has repositioned insurance industry in the region positively particularly in premium generation in Ghana and Guinea following the Nigerian example.
Also, the Secretary General of WAICA, William Coker, in his report of the sub-regional market, commended NAICOM for the enforcement and implementation of ‘No premium, no cover’ law in the insurance industry in Nigeria which has significantly improved the financial performances of the underwriting firms in the country.
According to him, regulators in some of the regional market have started to enforce similar rule in their countries to strengthen underwriting institutions.
The WAICA boss said “we commend the National Insurance Commission (NAICOM) for the bold measures taken in the past few years which have changed the way insurance business are conducted in the country thereby strengthened and enhanced public confidence in the sub-sector. We acknowledge that some regulators in the sub-region have emulated this method and have a positive impact in the financial position of insurance companies in the sub-region. We want to appeal to Sierra Leone and Liberia to enforce similar action in their country’s industry so that we can collaborate and move together as a strong regional market.
The commission has in January 2013, in enforcing the provisions of the Insurance Act 2003, issued a directive in respect of payment and remittance of insurance premium.
In reviewing the activities of the market said that the problem of outstanding premium\bad debt in the market was self-inflicted by operators, and if the commission continued to condone such act, it would get to a point where insurance firms would not be able to pay claims of N1 million due to bad debt.
The commission said, “We applied drastic measures on this issue in 2013 and we are not relenting in our efforts for the operators to toe the line. If we look at the Insurance Act 2003 on ‘no premium no cover’ , we are not supposed to have this debt burden. If we agree to make a law to assist us, then why do we get ourselves involved in this misbehaviour. We are here to protect the interest of all stakeholders, we will no longer tolerate this act.”