The National Insurance Commission (NAICOM) has urged the board of directors of insurance companies to give prompt claims settlement a priority in their policy-making process in their respective organisations.
Besides, the commission also warned insurance operators in the country that delays in the settlement of claims will no longer be tolerated.
The regulator explained that this has become necessary to restore confidence in the industry and position the sector on a sustainable growth path for increased contribution to the economy.
However, it called on insurance institution directors to ensure their organization’s financial soundness and general well-being by monitoring the management, to guarantee efficient deployment of human and capital resources for the overall benefit of all stakeholders.
These formed parts of the submission, the Commissioner for Insurance, Segun Omosehin, at the 2024 Insurance Directors Conference organised by the College of Insurance and Financial Management (CIFM), with the theme: “Board Performance in the Nigerian Insurance Industry: A Governance, Risk, and Compliance (GRC) Approach”.
The commissioner expressed optimism that by the time the Insurance Industry Reform Bill 2024’ which has scaled a second reading on the floor of the Senate becomes law in the industry will stimulate the accumulation of long-term funds for infrastructural financing and improved Return on Investment (RoI).
He added that once the regulator and underwriting firms can successfully navigate the recapitalisation corner, they could be on their way to entrenching a financially solid, vibrant, viable, and active insurance market that would bring about not only an increase in penetration but a substantial increase in the industry’s contribution to Gross Domestic Product (GDP).
He noted that the commission shall continue to introduce new reforms and initiatives in the march towards achieving the full potential of the industry, stressing that the insurance sector in Nigeria, with a contribution to the nation’s GDP in the second quarter of 2024, the insurance sector contributed 8.11 per cent has underperformed its potential especially when compared with other sectors in the financial services industry.
“To build the capacity of the stakeholders, the commission resolved to conduct a series of programmes for all its stakeholders.
This engagement, therefore, is one of such programmes earmarked by the commission to keep members of the Board of Directors abreast of the workings of the sector being one of its critical stakeholders,” he said.
Omosehin stressed that in the last few years, the insurance industry has witnessed a series of changes following reforms embarked upon by NAICOM.
According to him, these reforms include financial reporting standard, No Premium No Cover, Corporate Governance Code, Risk Based Supervision framework, Financial Inclusion, Claims Settlement, Market Conduct, Expansion of Distribution Channels, Recapitalisation, and more, adding that all these initiatives are aimed at building confidence, trust and enhancing market value and profitability.
He charged members of boards of companies to ensure the financial soundness and general well-being of their organisations, by monitoring the management, to guarantee effective and efficient deployment of human and capital resources to benefit all stakeholders.
The observance of this role, he said has been lacking in some of the companies and which has contributed in no small measure to the challenges facing these companies today.
