We Are Ready To Assist Member States In Developing RBS Framework-NAICOM

National Insurance Commission (NAICOM) has said it is ready and available to assist any member state in developing their RBS frame work, RBS manual and knowledge sharing.

This assertion was made by the Chairman College of Insurance supervisors of the West African Monetary Zone Mr Agbola Pius at the second meeting of the college hosted by Nigeria.

Mr Agbola in his address to delegates noted that the insurance business evolved through the desire of entrepreneurs to curtail the negative effects of the risk materialising. “Hence, that is why Insurance is regarded as a risk transfer mechanism. A business that exists to ensure the survival of other businesses.”

According to him, an entrepreneur who establishes an Insurance business or Company may choose to stay small, serving the local markets. Alternatively, the companies may not have the options to stay small as there are so many other factors that could make each company to expand and go beyond the shores of the jurisdictions and these factors can be categorised into; push or pull factors.

He, therefore, explained that push factors include; risk diversification, declining opportunities in the home jurisdiction, and the need for consolidations, etc. Pull factors he said include the need to follow their clients abroad which is common in the oil and gas sector, expected benefits (i.e. large profit margin); available unutilised potentials, etc.

“The special nature of Insurance and the fact that it is a business in the financial sector entails that it is highly regulated in the jurisdiction of operation. As the business expends beyond the jurisdiction of establishment or operation, the need for bi-regional or multi-regional co-operation and/or understanding grew. Hence, the need for this regional integration is called the College of Insurance Supervisors of the West African Monetary Zone. The College is also established to Complement and implement the ideas, Projects and directives of the parent body – WAISA.”

“The last paper for this Meeting which is scheduled for the 3rd day is the sharing of Nigeria’s experience on Risk Based Approach of Onsite Examination. I am very sure that the member states will have some take – away from the presentation. The hosting of the Regional RBS by NAICOM and Toronto Centre, Canada in February 2022 has enriched our understanding of the Risk Based Supervision and/or Risk Based Capital. Nigeria would be glad to share the RBS Framework for Insurers and Reinsurers in Nigeria with member states.”