The Commissioner for Insurance and Chief Executive Officer of National Insurance Commission ( NAICOM), the national body responsible for insurance supervision and regulation in Nigeria, has charged insurance companies to integrate Governance, Risk and Compliance at the Board level.
He gave the charge while delivering the opening remarks at the 2024 Insurance Directors’ Conference held Wednesday in Lagos.
He described the theme for this year’s conference “Board Performance in the Nigerian Insurance Industry: A GRC Approach” which focuses on the performance of the Board and the critical role of Governance, Risk and Compliance principles as timely.
“In today’s global business landscape, integrating GRC at the Board level is vital for business success and sustainability. It is no longer optional, but an essential ingredient for enhancing decision- making. transparency, accountability and risk management. Effective GRC ensures that Boards have the necessary tools to make informed decisions, identify potential risks, and maintain the highest standards of compliance
Omosehin stressed that “as a regulator, we believe that one of the key challenges that the insurance industry is currently grappling with is the issue of subpar corporate governance practices, poor risk management and a very low compliance culture.
“To overcome these challenges. the Board as the highest policy making organ for the various institutions must demonstrate genuine commitment and strict adherence to Governance, Risk, and Compliance principles. If carefully implemented this will improve decision-making, increase transparency and accountability, and ultimately improve regulatory compliance.
“Distinguished Ladies and gentlemen, on our part, the National Insurance Commission (NAICOM) is committed to aligning the insurance sector with the President’s goal of growing the Nigerian economy to USD$1 trillion by 2030,and to achieve this, the Commission is committed to creating the necessary regulatory framework required to achieve meaningful contribution from the insurance sector. De-risking a trillion-dollar economy takes more than mere rhetorics.
“To this end, we are fully committed to working with the National Assembly in delivering the required legal and regulatory framework which would flow from the successful passage of the 2024 Insurance Reform Bill.
“Also, as part of our strategic plan, the commission has set 5 key priorities that will deliver on this agenda: safeguard policyholders and improve confidence in the insurance industry; Strengthen our supervisory capabilities; Improve safety and soundness of our institutions; foster Innovation and sustainability of the insurance industry, and Enhance overall insurance accessibility and penetration in Nigeria
Unifying our efforts to embed these critical pillars across all stakeholders’ strategies will ultimately redefine the industry’s landscape and chart a clear path to success. At this critical point, I want to emphasis the importance of addressing certain critical areas that are pivotal to the insurance sector’s expansion and safeguarding policyholders’ interests. …
“The Commission’s primary focus is on ensuring timely payment of genuine claims (payment of claims and timely too).
The insurance commissioner reiterated its expectations that all insurers are to significantly reduce their outstanding claims by the end of the year, as emphasized during the last Insurers Committee meeting.
Omosehin emphasised that unnecessary delays in the settlement of genuine claims will no longer be tolerated.
“As a Commission, we are committed to strictly enforcing the law and taking swift action against any insurer failing to meet their claim obligations. Simply put, if a company cannot honor legitimate claims, it has no place in our industry.
“The financial stability and soundness of our institutions are now more vital than ever. To remain relevant and competitive, our institutions must comply with all the relevant prudential regulations and requirements. We must begin to prepare our various entities well ahead of the Risk-Based Capital regime, so ensuring adequate capitalization is no longer optional. We must prioritize robust capitalization to effectively tap into target markets and navigate current industry realities.
“The Commission, in the last one and half years have successfully examined a few of our institutions using the Risk Based Supervision Approach, even though the exercise has not been fully completed. However, we are using this medium to seek your cooperation as Directors of those institutions and demand compliance on issues that have been raised and directed to the various Boards, for attention.
“In conclusion, distinguished directors, I urge you all as policymakers across our institutions to develop and implement policies that promotes adherence to good governance, effective risk management and compliance principles. Our goal is to ensure sustainability, securing the long-term viability and future resilience of insurance entitities.
We all have a stake in the prosperity of our institution since the growth of the insurance sector is essential to the overall health and resilience of the national economy.