NAICOM opts for new strategies to grow insurance industry

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…Embraces international reporting standard
Determined to regulate an industry that would command the confidence of the insuring public, contribute to the overall development of the economy and compete globally, the National Insurance Commission (NAICOM) recently rolled out a number of strategies.
The commission believes that it has the responsibility to create market opportunities that would enable operators grow their revenue base, while also ensuring that the operators play by the rules of the game, meeting the expectation of consumers.
Remi Babalola, minister of State for Finance, told insurance industry operators at the International Insurance Conference held in Lagos recently that the underlying factor in the reforms was to build an industry that would enjoy the confidence of consumers, such that general insurers can meet the growing risks of an uncertain world and be there for them in times of need.
Babalola urged consumers to be confident that the industry was keeping their savings secured and also confident that as institutional investors they were holding companies to account and ensuring the long term stability of the nation's economy.
"On our part as a government and NAICOM as a regulator, all efforts will be made to ensure the enforceability of insurance regulations in the country," he pledged. On the revival strategies, Fola Daniel, commissioner for Insurance, said the existing insurance laws were currently being repackaged into a consolidating legislation that would meet international best practice. Daniel said the new law for the first time would form the all time compliance-base structure to main-frame structure that makes room for extensive use of regulations and guidelines to cover exigencies.
"It is hoped that the executive will be able to mobilise the bill through the National Assembly before the end of the year," Daniel said.
The insurance commissioner further stated that the commission was looking towards deepening the market to grow industry premium, through full implementation of its programme- the market Development and Restructuring Initiative- which intends to enforce compliance on six compulsory insurances. This, according to him, if fully implemented, would push industry premium to N1trillion by 2012 and N6 trillion by 2020.
Besides, Daniel hinted that the commission was currently carrying out a review of the financial reporting practices in the insurance industry and had recently issued a circular drawing attention to those practices that are not in compliance with the companies and Allied Matters Act; the Insurance Act 2003 and the Nigerian Accounting Standard Board.
It is the hope of the commission that the changes brought about by the circular will be apparent in the financial reporting of insurance companies for the 2009. Consequently, NAICOM has set up an Accounting Practices Committee that will attend to emerging and leading accounting issues as they affect the insurance industry.
Membership of the committee, the insurance apex regulator hinted, included auditors, the Stock Exchange and representatives of the insurance industry.
It is expected that the committee will proactively deal with accounting challenges and facilitate the proactive consideration of the peculiarities of the Nigerian insurance industry in process of International Financial Reporting Standard setting.
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