By Kehinde Ibrahim Lagos
THE National Insurance Commission (NAICOM) has issued a directive to all insurance companies to significantly reduce outstanding claims before the end of the year.
This mandate was delivered by the Commissioner for Insurance and Chief Executive Officer of NAICOM, Olusegun Ayo Omosehin, during the 2024 Insurance Directors’ Conference held in Lagos.
The Commissioner noted that the era of unnecessary delays in settling legitimate claims is over, warning that insurers who fail to meet their obligations will face severe regulatory actions.
“As a Commission, we are committed to strictly enforcing the law and taking swift action against any insurer failing to meet their claim obligations. Simply put, if a company cannot honor legitimate claims, it has no place in our industry,” Omosehin declared.
He stressed the need for insurers to prioritize financial stability and adhere to prudential regulations. He called on institutions to prepare for the impending Risk-Based Capital regime, noting that adequate capitalization is essential for market competitiveness and resilience.
“We must prioritize robust capitalization to effectively tap into target markets and navigate current industry realities,” he said.
The Commissioner also noted that NAICOM had conducted preliminary Risk-Based Supervision examinations of several insurers over the past year and a half. While the exercise is ongoing, Omosehin urged company boards to address compliance issues raised during the process and demonstrate a firm commitment to Governance, Risk, and Compliance (GRC) principles.
He added that adherence to GRC principles would enhance decision-making, increase transparency, and improve regulatory compliance, ultimately strengthening the insurance sector’s capacity to meet its obligations.
NAICOM reaffirmed its commitment to aligning the insurance sector with President Bola Tinubu’s vision of growing Nigeria’s economy to $1 trillion by 2030. Omosehin acknowledged that the sector must contribute meaningfully to de-risking the economy, stating that “de-risking a trillion-dollar economy takes more than mere rhetoric.”
To support this ambition, NAICOM plans to collaborate with the National Assembly on the successful passage of the 2024 Insurance Reform Bill, which will provide the legal and regulatory framework needed for the sector’s transformation.
As part of its agenda, NAICOM outlined five key priorities to enhance the industry’s contribution to economic growth: safeguard policyholders and restore confidence in the insurance industry; strengthen supervisory capabilities; Improve the financial stability of institutions; foster innovation and ensure the sustainability of the insurance industry; Enhance insurance accessibility and penetration across Nigeria.
The Commissioner reiterated NAICOM’s dedication to implementing these strategies to position the insurance industry as a critical driver of economic growth and ensure it plays a pivotal role in achieving Nigeria’s long-term development goals.