In readiness for smooth implementation of Risk Based Supervision (RBS) in full scale, the National Insurance Commission (NAICOM) has organised a seminar to increase the level of awareness among insurance operators in Lagos.
Speaking at the seminar hosted by Munich Re Africa, NAICOM’s Deputy Commissioner (Technical), Muhammed Kari, affirmed that arrangements have been concluded by the commission to adopt RBS approach to the supervision of insurance and reinsurance companies in Nigeria.
He said “We believe that a sound regulatory and supervisory system is necessary for maintaining a fair, safe and stable insurance sector for the benefit and or protection of the interests of stakeholders, as well as promote stability of the financial system.
“In its earlier forms, supervisory approaches tended to be ‘compliance-based’, aimed mainly at ensuring compliance with the rules laid down for financial soundness and the conduct of business.
“The risks associated with compliance-based approaches are that they may lead to excessive focus on observed non-compliance and to insufficient understanding of key business drivers and flaws in risk management practices of insurers.
“However, an element of compliance monitoring is necessary in any supervisory approach to ensure that essential minimum standards are met and that the overall regulatory and supervisory regime has credibility.”
Source : Independent