NAICOM Urges Insurers To Beef Up Claim Reserve
Nigerian Insurance industry’s primary regulator, the National Insurance Commission (NAICOM) has called on the industry operators to beef up claims reserve so that they will have enough funds to cater for claims settlement whenever loss occurs.
The Commission made the call at a seminar organised for insurance journalists in Uyo, Akwa Ibom State recently.
Claims reserve is money set aside for a claim that has been reported but not settled (RBNS) or incurred but not reported (IBNR). An insurance company assigns a claims reserve to each file, reflecting its best estimate of the eventual settlement amount.
Speaking on the topic “Re-Awakening the Nigerian Insurance Industry through Claims Settlement,” Assistant Director, Complaint Bureau Life, Mrs. Agustina Onojake, said Section (20) (a), (b) and (c) of the Insurance Act 2003 requires insurance companies to make provisions that will cater for unexpired claims and outstanding claims.
In order to re-awaken the industry through claims settlement, she urged insurance companies to beef up claims reserve to cater for claims settlement when loss occurs.
While urging compliance with Section 25 (1) and (2) (a-g) of the Insurance Act 2003 regarding Protection of Policyholders Funds, Mrs Onojake posited that “Section 25 (1) and (2) (a-g) of the Insurance Act 2003, protects policyholders fund by directing the insurers on how to invest policyholders’ funds.
“Insurance companies should strictly comply with this provision of the Act at all times to enable them to mitigate the risk of not being able to perform claims obligations when a loss occurs as a result of an inadequate investment of policyholder’s funds.”
She said the Commission had made numerous rules and regulations concerning the protection of policyholders to ensure that genuine claims are settled timely.
“The Commission,” she said, “had also established Complaints Bureau to which complaints against the insurance institution are submitted by members of the public and where complaints against insurance institutions are resolved.”
Mrs Onojake said the Inspectorate Department of the Commission had carried out several inspections on insurance institutions to enhance insurance companies’ solvency so that claims would be settled timely.
According to her, the Regulator should not relent in their functions. They should continue to make rules and regulations to enhance fair customer treatment as well as supervise the compliance of the regulations to ensure a robust claims management system. This will assist in re-awaking the insurance industry through claims settlement.
