NAICOM’s regulatory priorities for 2017 stalled by late release of funds to MDA’s
Federal Government Ministries, Departments and Agencies (MDA’s) that are supervised by Ministries for approval of budgets did not get their funds for the outgoing year until September 2017, and this affected their performance, BusinessDay investigations have revealed.
Except for agencies like the Central Bank of Nigeria (CBN), National Pension Commission (NAICOM) and others that report directly to the presidency, most others including the National Insurance Commission (NAICOM) suffered the delay.
Our investigations show that this delay contributed largely to why regulatory priorities of NAICOM set out in 2017 were not adequately implemented and enforced.
NAICOM had a the beginning of 2017 said its regulatory and supervisory priorities for the insurance industry will focus on customer protection and market stability while drawing the attention of operators to be prepared to comply where necessary.
One of the target focus of the Commission was the re-launch of the Market Development and Restructuring Initiative (MDRI), with special and intensified implementation efforts on enforcement of compulsory insurance, diversification of distribution channels, increase in access points for insurance services, micro insurance, takaful, improvement in data collection and promotion of financial literacy.
In a statement released by the Commission then, NAICOM said it was going to carry our capital verification exercise. “To ensure the protection of policyholders and beneficiaries of insurance contracts against unexpected losses of insurance companies, the Commission will undertake a verification of the capital resources of all insurance companies in the first quarter of 2017. The cost of this exercise will be borne by the companies (the modalities shall be communicated in due course).”
NAICOM also noted that this will entail verification of the Assets and Liabilities of all insurance companies. “In preparation for this, boards were advised to ensure fairness in the valuation of assets and liabilities of their companies when presenting the financial statements for the year ending 31 December 2016. All professionals that participate in the financial reporting supply chain are expected to ensure their duties in the valuation of assets and liabilities and issuance of opinion on financial reports are discharged creditably following relevant laws and professional standards.”
Other areas looked into by the commission in the outgoing year include management expenses of Insurance Companies; Statutory returns submission and compliance; risk-based supervision road map.
“As indicated in the draft exposed last year, the commission already has components of a risk-based solvency regime in place which will only be improved upon in the light of changes made in regulatory standards after they had been introduced and the operating context of the Nigerian Insurance Industry.”
NAICOM also listed other areas of focus to include Information technology; competence of directors, senior management and persons in control functions; corporate governance; service delivery by the commission.