Underwriters prepare for standard on insurance contracts

The National Insurance Commission says it is preparing the underwriting firms for the enforcement of the International Financial Reporting Standard 17 which will commence in the sector in January 2022.

IFRS 17 ‘Insurance Contracts’, which was issued by the International Accounting Standards Board in May 2017, is designed to achieve the goal of a consistent, principle-based accounting for insurance contracts.

NAICOM disclosed this while outlining its activities for the 2020 financial period.

The commission stated that it planned to enhance financial reporting with respect to insurance contracts; and provide guidance to be issued to the industry and subsequent constitution of the Nigerian Insurance Industry Financial Reporting Group.

It disclosed that sensitisation had been conducted ahead of its implementation, which would commence on January 1, 2022.

The commission said it would ensure capacity building and issuance of a Risk Based Supervision framework to the insurance industry.

The RBS framework, it noted, would refocus supervisory priority on insurers’ financial soundness through assessment of the adequacy of an insurer’s governance, risk management and internal controls as well as the solvency and liquidity of the insurer.

The acting Commissioner for Insurance, Mr Sunday Thomas, said the commission would in the course of the year, continue to introduce new reforms and initiatives in line with international best practices for attaining the level of growth and development desired for the sector.

He said that ensuring the right pricing of insurance products and effective deployment of technology for ease of transaction were among the key areas the commission would be emphasising on this year.

Thomas said, “Digitalisation of insurance business is no longer an option, but an imperative which we all have to work towards its actualisation. As we may all be aware, the industry is currently lagging behind other financial services sectors in this area.

“The commission is working vigorously to see that all its operations are digitalised. The year 2020 is a year for us to turnaround the fortunes of the industry and this cannot be accomplished without digitalising our processes and encouraging the industry to imbibe same.”