The National Insurance Commission (NAICOM), has restated the importance of the ongoing recapitalization agenda to the nation’s risk underwriting industry, saying its successful completion will position operators on a stronger footing that would be beneficial to the industry and the nation’s economy.
The acting Commissioner for Insurance, Mr. Sunday Thomas, who made this remark at the 2nd edition of Insurance Firms Directors Conference held in Lagos, pointed out that aside making operators to be more financially robust to cover risks, a vibrant insurance market would lead to improved insurance penetration with the attendant benefits of increasing the sector’s contribution to the nation’s GDP growth.
The risk underwriting expert listed other benefits of the recapitalization project, as including simulating accumulation of long-term funds that would be crucial in infrastructural financing, job creation, and an improved return on investment (ROI).
Thomas said: “I believe that once we can successfully navigate this corner, we could be on our way to entrenching a financially solid, vibrant, viable and active insurance market that would bring about not only an increase in penetration but a substantial increase in the industry’s contribution to GDP.
“This will also simulate accumulation of long-term funds for infrastructural financing, job creation, and an improved Return on Investment”, he added.
Noting further that the position of the Board of Directors is crucial in achieving a high level of efficiency in an institution’s corporate governance structure, the NAICOM boss said that this recognition underlined the theme of the forum, “Corporate Governance: The Panacea for Sustainable Growth and Development of Insurance Business in Nigeria” as a wake up call for board directors.
According to him, the low level of effectiveness of corporate governance oversights in the insurance sector remains one of the major regulatory concerns to the industry regulatory institution, adding that this is for the simple fact that the failure of corporate governance in the years past has played a prominent role in the death or distress of most corporate organizations the world over.
The chartered insurer clarified further: “Over the years, the Commission has made attempts at entrenching good corporate governance culture in the insurance sector. The development and issuance of Corporate Governance Code in 2009 and the Market conduct guidelines in 2014 are among efforts of the Commission in this direction.
“Let me state here for emphasis that the primary role of the Board either in a private or public entity remains the oversight of management to ensure the corporate goals, vision, mission and values of the entity are strictly upheld at all time.
“The board is also expected to ensure the financial soundness and general wellbeing of the organisation by monitoring the management, to guarantee effective and efficient deployment of human and capital resources in the overall benefit of all stakeholders. The observance of this role has been lacking in some of our companies and which has contributed in no small measure to the challenges facing these companies today”, Thomas added
He expressed the belief that members of the board can effectively perform their roles without necessarily interfering in management functions.