Insurance

Will risk-based capital change insurers’ recapitalisation roadmap?

The companies and their board are anxious to see the contents of the roadmap and how it will affect their capitalisation plans going forward.

Majority of the insurers are currently pursuing strategies to meet their long-term capitalisation objective after the last regulatory induced capital requirement was halted by court order.

Publicity Sub-committee of the Insurers Committee had disclosed after its last meeting in Lagos that the National Insurance Commission will release the risk-based capital road map end of April 2022.

Ebelechukwu Nwachukwu, chairperson of the publicity subcommittee said the commission was working to release the guideline by end of April, and has brief players to start marking preparations.

One of the pleas of the Commission is that operators should improve their documentation to enhance the efficiency of the supervisors, she said

The risk-based capital roadmap is intended to be a regulatory standard and not necessarily the full amount of capital that an insurer would need to hold to meet its objectives.

It helps to identify weakly capitalized companies, which facilitates regulatory actions to ensure policyholders will receive the benefits promised without relying on a guaranty association or taxpayer funds.

With planned adoption of risk-based assessment for insurance companies in Nigeria, NAICOM as foreclosed single capital requirement for players in the industry.