Insurance regulator, the National
Insurance Commission (NAICOM), says it was going ahead to implement its
Risk Based Supervision (RBS) initiative despite resistance from
some operating companies.
This decision, the commission noted, was
necessary to protect stakeholders’ interest and guide
against unprecedented failure of organisations, either as a result of
negligence or ignorance.
RBS is a structured process aimed at
identifying the most critical risks that face each company and through a
focused review by the supervisor identify the financial vulnerability
to potential stakeholders.
Therefore, being more sensitive to the
risks incurred enables supervisors to protect policyholders’ interests
as effectively as possible and in accordance with common principles.
Mohammed Kari, deputy commissioner for
insurance, technical, NAICOM, said just as the financial system has
evolved so too has the supervisory framework.
“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.”
Kari made the remark at a seminar on the
Introduction of Risk Based Supervision in the insurance industry hosted
by Munich Re of Africa in Lagos.
According to him, while supervision in
the past tended to correct failures and operators lacked the vision
to see impending crisis, the new regulation would see ahead and stop
pending crisis.
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