The National Insurance Commission (NAICOM) has given insurance and reinsurance operators July 1 deadline to comply with its requirement on risk management in the industry. The deadline was contained in the “Guideline for Developing a Risk Management Framework for Insurers and Reinsurers in Nigeria” which was made available to newsmen in Lagos.
“This guideline must come into effect from July 1, 2012. All insurers and reinsurers must on that date comply with the provisions of this guideline,” it said. The guideline defined risk as the possibility that an event would occur and affect the achievements of a company’s objective, thereby decreasing value for shareholders. It also defined risk management as the process of identification, assessment and mitigation of risk to which the company is exposed. NAICOM said that the guideline would be used by the commission for conducting ongoing assessment of the risk management systems of all insurers and reinsurers. It also stated that the board of directors and senior management would take responsibility for company’s risk management framework and implementation, respectively.
“This guideline sets minimum standard required of every insurer to provide a reasonable assurance to the commission, policy holders, shareholders and other stakeholders that the. The Board of Directors shall have responsibility of ensuring adequate risk management framework including principles for how risks should be identified, assessed, monitored, controlled and mitigated within the company’s operations. The senior management shall have responsibility for implementing the framework for risk management approved by the board,” it stated.
NAICOM gives insurers, reinsurers July 1 deadline on risk management