The National Insurance Commission (NAICOM) says it has commenced the implementation of Risk Based Supervision (RBS) toward becoming the leading regulator of RBS in Sub-Sahara Africa.
Its Director, Inspectorate, Mr Agboola Pius, said on the sidelines of NAICOM 2022 Retreat for Financial Journalists on Monday in Uyo, Akwa Ibom.
The retreat had the theme: “Improving Insurance Access through Market Development and Innovation in 2022 and Beyond ”.
RBS was introduced by NAICOM 10 years ago as against Ruled Based Supervision to carry out supervisory or regulatory activities with a risk focus.
It is for the purpose of efficient risk management of resources by insurance companies and achieving maximum output.
Pius said that the commission had conducted trainings for its staff, using competent and experience experts in order to have smooth implementation of RBS.
He also said that NAICOM had developed a framework and produced an inspection manual on RBS.
“NAICOM, in collaboration with Toronto Centre, also organised a virtual programme for Sub-Sahara Africa between Feb. 28 and March 4.
“The commission, in its effort for a robust RBS regime, recently issued the 2022 code of good corporate governance and guidelines.
“A pilot run of RBS examination has also been done using five insurance companies, amongst others,” he said.
Earlier in his presentation, Pius listed credit risk, market risk, liquidity risk, insurance risk and operational risk as key elements in the NAICOM framework .
Others include legal, regulatory, compliance, reputational and strategic risks.
The director said that one of the tools in achieving the aim of modern insurance of identifying problem early was to act properly and apply effective RBS.
He charged insurance firms to place much identification on their inherent risk and the effectiveness of the control function.
Pius also told underwriters to build strong capital and good earnings with effective risk management control.