The National Insurance Commission (NAICOM) has issued a directive to insurance companies to settle all outstanding claims by December 31, 2024, in a move aimed at reinforcing industry credibility and accountability.
This mandate was communicated by Mrs. Ebelechukwu Nwachukwu, Head of the Communication and Stakeholders Management Sub-committee of the Insurers Committee, following a meeting held in Lagos.
At the gathering, which marked the first Insurers Committee meeting under the new Commissioner for Insurance, Mr. Segun Omosehin, NAICOM stressed the importance of maintaining sound industry practices by prioritizing claim payments.
According to Nwachukwu, who is also the Managing Director of Rex Insurance Ltd., the Commissioner instructed CEOs to ensure that no outstanding claims appear in their financial books by the close of 2024.
“The regulator emphasized a targeted approach to verifying the accuracy of outstanding claims on insurers’ records,” she said.
Insurance companies recapitalization
Alongside the push for claim settlements, NAICOM advised insurance companies to consider recapitalization to enhance their financial standing.
“Insurers are encouraged to start discussions with their boards and shareholders regarding potential recapitalization needs, to stay prepared for regulatory requirements,” she said.
- Nwachukwu noted that the regulator has shared a draft of Risk-Based Supervision (RBS) regulations with operators as a guide.
- The commissioner also addressed compliance with the “no premium, no cover” regulation, noting breaches by some brokers.
- This regulation mandates that insurance coverage should only be granted after receiving premium payments, aiming to strengthen cash flow and overall market stability.
Focus on data protection
NAICOM has also directed insurers to adhere to Nigeria’s Data Protection regulations to enhance consumer trust in the industry.
Additionally, the commissioner underscored the importance of implementing the 10-year Insurance Strategic Plan, which includes seven key goals aimed at meeting industry objectives by 2027.
Nwachukwu shared that the commission’s guidance reflects a unified vision for the sector’s growth, supported by a legal framework under the Insurance Bill 2024.
“The bill prioritizes regulatory compliance and prudential guidelines, aiming to eliminate corporate governance issues within the sector,” she noted.
- The commissioner also encouraged insurance companies to consider investing in the National Credit Guarantee Scheme, recently approved by President Bola Tinubu.
- According to Nwachukwu, such investments could allow insurers to participate in governance decisions within the scheme, enhancing their strategic influence.
- Progress on the NAICOM portal was another key topic, as the regulator announced that resources are in place to ensure its continued efficiency.
- The portal aims to streamline administrative processes, enhancing transparency and service delivery across the industry.
In alignment with its 10-year roadmap, NAICOM recently restructured its Insurers Committee’s sub-committees.
The new sub-committees focus on pivotal areas, including Insurance Sector Stability, Communication and Stakeholder Management, Technology and Talent Management, and Customer Service and Market Expansion.