Daily Independent (Lagos)
9 October 2008
The mode of regulation and supervision in the Nigerian insurance market will soon change to risk based, as is the practice in other jurisdictions worldwide, says Commissioner for Insurance, Fola Daniel.
Daniel, who gave this hint during the 2008 edition of Professional Forum of the Chartered Insurance Institute of Nigeria (CIIN) in at Abeokuta recently, stated that government reforms in the insurance industry have had serious implication on the performance of insurance regulatory agency to meet the challenges of the consolidation exercise in the insurance market, hence the need to restructure its operations.
He noted that "As we all know, insurance is an international profession and business. This change will also aid our companies in their drive to expand beyond the shores of Nigeria."
According to him, "these changes are to be backed by a comprehensive review of the main legislative instruments of our industry - the NAICOM Act 1997 and the Insurance Act 2003. Both legislation, he said, need urgent review to enable us effectively manage a modern industry of our vision where regulation is both forward looking and effective but without stifling competition and the entrepreneurial spirit of operators."
Daniel also spoke on the restructuring of the insurance regulatory body, saying the aim is to make NAICOM compare favourably with other financial services regulatory agencies have been effected by the board of the commission.
In the exercise, the organisational structure of the commission has been reorganised to promote good corporate governance and accountability in the establishment.
For instance, the operations department has now been changed to Authorisation and Policy Department to be headed by a director. Its functions will include licensing, policy and regulation, mergers and acquisition as well as corporate governance issues.
Besides, the existing Inspectorate Department has its functions expanded to include actuarial services, security fund management, examinations and interventions.
Similarly, the functions of the Supervision Department have been expanded to include financial analysis of companies report. A new department, Research and Statistics has now been created. This department has responsibility for IT, Library, Research and publications.
Also, to reduce the influence of civil service bureaucracy in the system, over 91 staff of the commission was sacked to give room for recruitment of people with technical known how to achieve the new vision of the commission.
He said that the government have noticed poor corporate governance and accountability in the establishment when compared it with other financial regulatory agencies like the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC) among others.
As a result, he said, NAICOM as its is presently structured cannot cope with the demands of the new insurance market environment because as a market regulator, it is expected to be ahead of the market operations in term of technical, management and supervisory role, as well as, reliable information on the insurance market, adding that the essence of the last recapitalisation and consolidation exercise in the industry was to strengthen public confidence in the insurance institutions.
The NAICOM boss said, "as a result, we have effected some staff changes which is part of our human resource review exercise to reposition NAICOM to the level of other regulators in the financial services both in Nigeria and elsewhere. This will create opportunity to inject new capacity required to achieve the new vision of the commission."
A cording to him, this excise on completion, will upscale the manpower capacity of the commission to meet the challenges of a fast growing industry. "It will also build he capacity to develop an interactive IT platform that will ease exchange of information, fast track processing of documents and requests. All this will aid planning and development both for government and the industry."
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