NAICOM Sustains Drive for Outstanding Claims Payment

For weak insurance firms that  currently finds  it difficult to meet their financial obligations, the present regime in NAICOM may not be in their best interest, writes Ebere Nwoji

The Commissioner for Insurance, Ayo Olusegun Omosehin, going by his current  programmes and actions  is one insurance commissioner among the past ones whose  regulatory prowess and modus operandi is sending shocks to the spines of insurance chief executives and other stakeholders in the insurance sector.

Omosehin  is presently gearing efforts towards ensuring that every operating firm in insurance sector is fit to be in operation.

His determination in this regard did not start today, from his first day of resumption in office as Chief Executive Officer  of insurance sector regulatory body, the National Insurance Commission(NAICOM), he did not mince his words and determination to exercise utmost probity in ensuring a safe, sound and stable insurance sector while protecting policy holders, public interest as well as improving trust and confidence in the Nigerian insurance sector.

He had insisted that during his regime, soundness of insurance entities and settlement of outstanding claims by operators should not be anything to joke with.

First Six Months

Six months into his assumption of office, he has sent a signal of  his administration’s zero tolerance  towards weak entities when on  October 30th 2024, the commission sacked the board of  African Alliance Insurance, a foremost life underwriting firm whose operations the commission had queried few months back due to inability to fulfill its financial obligations, especially to its annuitants.

At the press briefing in Lagos office of the commission , announcing the commission’s latest regulatory action, Omosehin informed journalists that it was the beginning of the journey as there were many African Alliances in the system insisting that such firms must choose to find ways of remaining sound or leave the stage for the commission to appoint its managers to run the entities and protect the interest of the insuring public while saving the image of the industry.

Before his regime, members of the insuring public including the media had often accused past regimes in the commission of shielding weak insurance firms, claiming to be giving them more time to recover from their financial weak state; but Omosehin from his first day in office had  made a passionate appeal to staff of NAICOM to embrace a new chapter with optimism as the new administration would work to enhance processes, leverage technology and foster a culture of excellence.

He  had hinted them of internal process overhauling to make it  more efficient to the public and engage more constructively with all its external stakeholders.

He said NAICOM  would play a critical role in shaping the Nigerian insurance industry to protect the interest of policy holders.

He said in sacking the board and management of African Alliance,the  commission had reaffirmed its commitment to maintaining the stability and integrity of the Nigerian insurance industry.

“Our actions today demonstrate our resolve to address concerns and protect the annuitants, policyholders and public interest,” the commission stated.

Thereafter, the commission staged the first Insurers’ Committee meeting which is a meeting between the commission and chief executive officers of insurance companies during which he announced that  the commission had given insurance companies  up to December 31, 2024 to  clear all outstanding claims.

First Insurers’ Committee Meeting

Briefing journalist on the commission’s stand shortly after the meeting, Head, Communication & Stakeholders Management Sub-committee of the Insurers’ Committee and Managing Director Rex Insurance Limited, Mrs Ebelechukwu Nwachukwu, said that  Omosehin, had charged insurance executives  to ensure that no outstanding claims would be  captured in their 2024 financial accounts.

According to her, the Commissioner also tasked the executives to defend the insurance industry through payment of genuine claims.

Nwachukwu further said that the CFI had also tasked insurers to pay specific attention to the implementation of the 10-year roadmap for the Insurance Strategic Plan.

She added that the Commissioner for Insurance (CFI) charged the insurance companies’ executives to defend the industry through payment of genuine claims, which is integral.

“The regulator said it would be checking in an intensive and focused manner the outstanding claims in the insurer’s books. The commission said its focus is on the soundness of the insurance industry, measured by the ability to meet their obligations when due,” Mrs. Nwachukwu said.

She said the CFI also charged the insurance companies to take steps towards recapitalisation by evaluating their financial position regarding the need to raise fresh capital.

According to her, the charge came from the regulator, having exposed a draft of the Risk-Based Supervision (RBS) regulations to the operators, adding that the CFI further encouraged brokers to ensure strict compliance with the “no premium, no cover” regulation, having observed some violations in the past.

Also, NAICOM encouraged the insurers to protect data and submit their companies’ financial statements on time to create more confidence in the industry.

Nwachukwu stated that the CFI charged the insurance operators to pay attention to the legal and regulatory framework for the industry under the Insurance Bill 2024.

“He spoke about focusing on compliance issues under the prudential guidelines released by NAICOM to the insurers and putting an end to corporate governance abuses recognised within the industry,” she said.

Directives

Before now, Omosehin had at different forums charged different arms of the industry to ensure they contribute their quota within their capacities in the new journey of transforming the insurance sector.

To the actuarial scientist at their first national conference shortly after his assumption of office he said: “Our mutual collaboration will seek to consider these factors: Regulation and Governance: Where we would need robust regulations to ensure the ethical use of AI in insurance, focusing on data privacy, fairness, and transparency.

Collaboration: Fostering partnership between actuaries and AI developers where actuaries bring domain expertise, while AI developers provide the technical know-how.  This would therefore create solutions that are both effective and ethically sound.

Upskilling and Reskilling: The actuarial profession needs to embrace continuous learning to stay relevant in the AI age. Therefore, equipping actuaries with skills in data science, machine learning, and AI will be essential.”

To the insurance professionals at the investiture of the current president of Chartered Insurance Institute of Nigeria (CIIN), Mrs Yetunde Ilori, Omosehin had said “Emerging realities and developments at the global and national levels today obviously calls for our collaborative effort to reposition the insurance profession and rebrand the industry such that our narratives can be better understood by all.”

“We should be mindful of the perception of the insurance profession by the public and be deliberate in putting our narratives across. On our part, the National Insurance Commission (NAICOM) is committed to aligning the insurance sector with the Renewed Hope Agenda of His Excellency, President Bola Ahmed Tinubu, and his ambitious goal of growing the Nigerian economy to $1 trillion by 2030.

“At NAICOM we view the institute as one of our veritable partners in the development of the much needed skilled-professionals in the course of achieving this goal.”

Giving the NAICOM’s move, It was l learnt that some insurance chief executives especially those whose companies have been wobbling financially before now are jittery praying that they would not be next to receive regulator’s hammer.

Competent sources volunteered that such firms are hopeful that the proposed risk based capital model be implemented by the commission so that they would have safe landing by restricting their operations to the class of business that their capital would carry instead of being sent out of business by the commission.