NAICOM sets December 31st deadline for claims settlement, unveils sector reforms
Joy Agwunobi
The National Insurance Commission (NAICOM) has instructed insurance companies to resolve all pending claims by December 31, 2024, in a move aimed at bolstering the credibility and accountability of the sector.
This directive was shared by Ebelechukwu Nwachukwu, the head of the Communication and Stakeholders Management Sub-committee of the Insurers Committee, following a meeting in Lagos.
The gathering marked the first session of the committee under the leadership of Segun Omosehin, the newly appointed Commissioner for Insurance.
During the meeting, NAICOM emphasised the importance of adhering to robust industry practices, with a particular focus on settling outstanding claims.
Nwachukwu, who also serves as the Managing Director of Rex Insurance Ltd., relayed that the Commissioner had directed CEOs to ensure that all outstanding claims are cleared from their financial books by the end of 2024. She highlighted that NAICOM has called for a careful approach to verifying the accuracy of these claims.
In addition to the push for resolving claims, NAICOM urged insurers to consider recapitalisation to strengthen their financial standing. “Insurers are encouraged to engage with their boards and shareholders about potential recapitalisation to ensure they are aligned with regulatory expectations,” Nwachukwu stated.
Furthermore, Nwachukwu revealed that NAICOM has shared a draft of Risk-Based Supervision (RBS) regulations with industry operators to guide their operations moving forward.
The meeting also covered compliance with the “no premium, no cover” regulation, which some brokers have been found to violate. This rule mandates that insurance coverage must only be provided once premium payments have been received, aiming to bolster cash flow and market stability.
NAICOM further instructed insurers to comply with Nigeria’s Data Protection regulations as part of efforts to build consumer trust. Nwachukwu also stressed the significance of the 10-year Insurance Strategic Plan, which outlines seven key objectives to be achieved by 2027.
According to Nwachukwu, the commission’s direction is underpinned by a shared vision for the sector’s growth, supported by the new legal framework provided by the Insurance Bill 2024. “The bill prioritises regulatory compliance and prudential standards, aiming to address corporate governance issues within the sector,” she noted.
Additionally, the commissioner recommended that insurance companies explore investment opportunities within the National Credit Guarantee Scheme, recently approved by President Bola Tinubu. Nwachukwu explained that such investments would offer insurers a chance to influence governance decisions within the scheme, thereby increasing their strategic involvement.
Another key topic discussed was the progress of the NAICOM portal, which aims to enhance the efficiency and transparency of administrative processes within the sector. Resources are already in place to ensure its continued effectiveness.
In line with its 10-year strategic roadmap, NAICOM has also restructured its Insurers Committee sub-committees. According to the commission, the new sub-committees will focus on crucial areas, including Insurance Sector Stability, Communication and Stakeholder Management, Technology and Talent Management, and Customer Service and Market Expansion.