BY NKECHI NAECHE-ESEZOBOR—-The National Insurance Commission (NAICOM), in collaboration with industry operators, on Thursday set September 2022 deadline for the announcement of new premium rate for third-party motor insurance in Nigeria.
The new rate which will be an upward review of the current N5,000 premium paid by motorists, is the outcome of the discussion between the committee which consists of the Commission and chief executive officers of underwriting firms.
Third party motor insurance is one of the compulsory classes of insurance and may be the most popular among the six compulsory insurance policies stipulated by the insurance Act 2003.
This was made known by the Vice Chairman of its Sub-Committee, Publicity and Communication, Mr. Segun omosehin at media briefing on the outcome of September insurers committee meeting held yesterday in Lagos.
Speaking further he said the regulator has adopted in principle the implementation of ECOWAS Brown Card and third party motor insurance in Nigeria.
According to him what is left to be finalized is the applicable premium that will be charged and that they are working on simply because they want to be sure they consider all the pros and cons, ticking all the views and concerns with consideration before the final decision on pricing.
On the date for takeoff he said “we are hopeful that this will be concluded on or before ending of the month of September, 2022.”
On Risk Based Supervision he said “I can announce to you that technically we have commenced Risk Based Supervision. The pilot phase has commenced with about eight companies to enable final adoption and guidelines to be released across the enter market.”
Speaking on the prospects of the RBS, Commissioner for Insurance, Mr. Sunday Thomas, had noted that RBS has become a reality with the take off.
He said: “The supervisor is expected to assess systemic risk that affects the industry as a whole, and then analyse the level of risk specific to each firm. It takes a holistic approach, and studies the business units within the enterprise, each of which may carry varying levels of risk.
The RBS transition process, will allow NAICOM determine capital requirements for individual insurance companies based on the risk they carry in their portfolios instead of applying the same minimum standards across the industry.
On Bancassurance he said the new guidelines on Bancassurance soon to be released by the commission .
He said operators were hopeful that the revised guidelines on bancassurance when released would address some of the concerns of operators on the guidelines currently in place.
“One of the issues raised is the constraint on an insurance company to have dealings with not more than two banks at a time.
“We are hoping that the regulator would consider some of the issues raised from the market and take them into cognisance in the new guidelines.”
On IFRS-17, he said that stage work towards the adoption of the standard had begun and underwriters were expected to work towards the full adoption of the standard before the effective date.
