BY NKECHI NAECHE-ESEZOBOR–The Commissioner for Insurance, Mr. Olorundare Sunday Thomas, has inaugurated the Nigerian Actuarial Society Discount Rate Committee (NAS-DRC), which is expected to standardized discount rate for insurance operators in the country.
Speaking at the event which took place recently in Abuja, Thomas noted that the committee is charged to set a standardized basis of determining discount rate factors for use by the insurance industry and other stakeholders in the financial services sector, particularly in the implementation of the International Financial Reporting Standard 17 (IFRS 17), Insurance Contracts.
He also disclosed that membership of the NAS-DRC has been suitably drawn from representatives of Nigerian Actuarial Society (NAS), National Insurance Commission (NAICOM), representatives of Audit Firms, as well as Resident Actuaries of Insurance Operators (with annuity business).
He said the President of NAS is to serve as the Chairman of the committee, while the representative of NAICOM (not below the rank of a Director) is to serve as Co-Chairman and the NAS is required to provide the Secretariat.
While noting that the role of Actuaries in the implementation of IFRS 17 cannot be overemphasised, the NAICOM boss also maintained that the need for credible, prudent, consistent and sustainable discount rate devoid of possible manipulation by different stakeholders, if left to determine same for individual company’s use.
The objectives of the NAS-DRC include: to determine the risk-free yield curve for use by the insurance industry; and to provide commentary on any market movement that might impact on the determination of the risk-free yield curve.
“It is thus my sincere expectation that the inauguration of the NAS-DRC will no doubt enhance accountability, prudence and comparability in financial reporting and thereby support the stability in the Nigerian financial system. I am hopeful that the deliberations and activities of the NAS-DRC will bring about the desirable impact for the Nigerian financial system. Note also that the terms of reference remain as earlier circulated to members.”
