Despite the near turning point in the ongoing segmented recapitalisation of insurance and reinsurance companies ending this December, stakeholders say the tier-based capital model earlier introduced by the National Insurance Commission (NAICOM) in 2017 is the right direction if the insurance industry in Nigeria must grow and make a meaningful contribution to the economy.
Daily Independent exclusively noted that operators are more comfortable with the tier-based capital model as it allows every company to operate according to its risk appetite while the industry will not incur any form of casualty or job loss at the end of the exercise.
In addition, stakeholders reason that risk-based capital model is a universal model which conforms to international best practices, and asserted that the model be part of the consolidated Insurance Bill before the National Assembly.
Stressing further, they noted that the risk-based capital model is the direction to go if the insurance industry must grow and contribute meaningfully to the gross domestic product (GDP).
Ganiyu Musa, Chairman, Nigerian Insurers Association (NIA), who is also the Managing Director of Cornerstone Insurance Plc, stated that in adopting risk-based capital adequacy template, the association took cognizance of the need to consider insurance risk, market risk, credit risk, and operational risk, as well as the need to apply such capital charges on assets and liabilities.
source; independent.ng
