It is indeed my pleasure to welcome all of you to the 2010 Management Retreat of the Commission with the general theme- Insurance Regulation in an Uncertain Economy. Let me state categorically that the Commission has always felt the need to set goals for itself and to design and monitor strategies for realising set goals. It has therefore always organised retreats of this nature.
However, the present retreat must be considered as very strategic, the reason being that it is coming on the heels of the recent global economic crises. It should therefore be a platform for us to take stock of the key lessons learnt from the crises and align our organizational focus.
Sincerely, I agree with Larry Elliot and Richard J. Schroth when they stated that competitive and aggressive business leadership have crossed the line and our system of taking money from investors and reporting on corporate performance no longer works. Indeed, the financial manipulations and rascality that have emerged over the years are no long tolerable in the new order.
Ladies and Gentlemen, without our consent and without any advance preparations, the recent economic crises has oozed all of us out into a new economy or better still, a global economic planet where it is no longer convenient to cut corners and where survival is equal to having the ability to integrate new knowledge and new possibilities with basic truth of business success.
The hard reality is that in this new economy, too many individuals and businesses who are not fully vested in the future and who cannot distinguish between their heritage and their destiny will fail. Where do we stand as regulators?
Of course we cannot be bystanders. All over the world,public services are being pressed to improve performance and deliver results even with declining Government revenue. The critical concern has become how to manage public sector performance to achieve maximum outcomes from given resource levels. Greater regulation and monitoring of exposure has therefore become an important aspect of maintaining financial stability.
You will recall that in July 2009, the International Association of Insurance Supervisor (IAIS) began a review of the Insurance Core Principles (ICP) and their associated standards, including standards on corporate governance and group wide supervision. The Commission supports the proposed review of these principles and will ensure that they are integrated into its operations.
Meanwhile, in line with existing international best practices, the Commission has proposed enhancement to the existing corporate governance framework for local insurance institutions. The measure seeks to enhance independence of the Board, strengthen Board oversight on risk management, and ensure that directors are equipped with appropriate skills and are able to commit enough time to oversee the operation of the insurance companies. This has informed the ongoing promotion of awareness for directors as sponsored by the Commission.
In terms of risk management and supervision, the Commission is already migrating along with the rest of the world from compliance-based supervision to risk-based supervision. The road map for this migration has already been circulated to staff. With respect to best practices in insurance accounting, the Commission has also concluded plans and will soon embrace fully the International Accounting Reporting Standard.
Achieving the above objectives will require conscious efforts aimed at closing the present yawning gap between business performance and individual performance thereby making performance management very imperative. And herein lays the essence of this retreat.
I am happy to announce the Commission’s resolve to strengthen the delivery of training to our staff. Programmes for training have now been structured to meet the needs of different levels of staff. For emphasis, during the coming year, the Commission plans to institute a Professional Requisites and Outcomes Framework (PROF), which encompasses the functional competency road map for various job roles in the Commission. In the time being, however, the Commission is and will continue to remain passionate about knowledge sharing among staff. Our overall desire is to have a Commission that is knowledge driven. And the truth must be told namely, that we cannot effectively regulate an industry we are not ahead of. We therefore have no choice than to become more futuristic. We must endeavour to escape the dead hand of precedents and become fully vested in the future.
The economic crises has come and gone. The lesson we all learnt is that we have entered a new economic age where it is difficult to cut corners. The successful enterprises, nay regulators of the next decade will be those who can integrate new knowledge and new possibilities with basic truths of business success.
Ladies and Gentlemen, let me restate that we are on this retreat to rediscover ourselves and to reinvent insurance regulation in the light of the current world realities. We are here to integrate new knowledge and new possibilities with basic truths of business success. We are here to rethink the future of the insurance industry. All hands must therefore be on deck if we must achieve our set objective.
Once again, I welcome you all to this epoch making retreat, and May God bless our efforts.
Commissioner for Insurance