NAICOM Issues New Guidelines To Promote Innovation, Professional Conduct
As part of its strategic objective to drive innovation in products and services, and ensure that operators are professional in the conduct of their businesses, the National Insurance Commission (NAICOM), has issued some new guidelines including Insurance Regulatory Sandbox Operational Guidelines; Market Conduct Guidelines for Takaful & Retakaful Insurance Operators, and Enterprise Risk Management Framework for Takaful and Retakaful Operators in Nigeria.
A statement by the Head, Corporate Communication and Market Development of the Commission, Rasaaq ‘Salami, said the objective of the Insurance Regulatory Sandbox Operational Guidelines was to provide insurance institutions, other firms and persons the opportunity to test business models, products and services that will enhance efficiency in meeting consumers’ needs.
Moreso the insurance Regulatory Sandbox Operational Guidelines would encourage innovation that will drive financial inclusion and positive competition, as well promote and deliver economic benefits, by lowering the cost of business operations.
For Enterprise Risk Management Framework for Takaful and Retakaful Operators in Nigeria, the Commission maintained that the Guideline was intended to establish minimum Risk Management Standards for Takaful Insurance Operators (TIOs) in Nigeria.
“This guideline discusses how management of risks inherent in the TIO shall be implemented as a TIO is exposed to risks that may affect its ability to achieve its objectives and its existence.
“This Guideline has been designed to articulate principles that may be applied to a variety of circumstances, and does not prescribe specific quantitative standards. This is for practical reasons; differences in the environments in which different TIOs operate, as well as differences in their operational frameworks, meaning that a detailed prescription that might be calibrated to suit one entity, would not necessarily be suitable for others.
“This guidelines would help you understand the risks to which a Takaful Undertaking is exposed; provide minimum standards for the development of a Risk Management Framework for ease of management of the Takaful undertaking and supervision by its governing bodies and Supervisory Authorities; and helps to create a safe and prudent environment for the growth, sustainability and development of the Takaful industry.”
NAICOM affirmed that the Guideline is applicable to all Takaful undertaking, adding that Reference to Takaful Insurance Undertakings also refers to Retakaful Undertakings. For Market Conduct Guidelines for Takaful & Retakaful Insurance Operators, the main objectives are: To set out minimum standards required from Takaful Insurance Operators in their dealings with Participants/ Policyholders, Shareholders and other Stakeholders, and to promote greater fairness and transparency between Participants/ Policyholders and Takaful Insurance Operators.
Salami said another objective of this guidelines was to establish strong Market conduct and business practice amongst the practitioners /Stakeholders and enhance mutual confidence for Market efficiency as well as set out the general licensing and authorization requirements for Takaful Insurance operators and intermediaries.
“To state the responsibility of Takaful insurance operators in ensuring that their activities are properly coordinated and carried out in a professional manner, to provide principles to ensure that customers are treated fairly, prior to the inception and discharge of the contract.
“And to provide the Board of Directors and Management of Takaful Insurance Operators with a framework for the establishment of policies and procedures for effective Takaful operations. The Commission expects all Operators to ensure compliance with the new guidelines to the benefit of all stakeholders,” he added. (Sun Newspaper)