The Federal Government on Thursday dropped a hint on its plans to review the existing Insurance Act of 2003 and the National Insurance Commission (NAICOM) Act of 1997 in line with the current realities of a modern economy.
This was disclosed in Abuja by the Minister of State for Finance, Mr. Remi Babalola, while launching the code of corporate governance for the insurance industry.
The Minister disclosed that a committee on the review of the Insurance Act and NAICOM Act would be inaugurated in the next few days.
Babalola, who reiterated the role of insurance sector in the growth and development of the Nigerian economy, said it had become necessary to ensure that clear operational and prudential guidelines as well as sound code of corporate governance for the sector was operative and diligently enforced.
"The fact that we assemble here today to perform this important event is a true manifestation of government’s commitment to strengthen the insurance industry in
Nigeria, to actually perform its role as a catalyst for economic growth," he said.
According to the Minister, "At a time like this, when the world is facing economic challenges, it is more important to focus on the issue of corporate governance. It is obvious that one of the major causes of the global financial meltdown is the failure to adopt and adhere to corporate governance standards at all levels.
"Therefore, a standard code of conduct for professional dealings within the insurance industry is not only desirable but imperative."
Babalola expressed regrets over the insufficient financial disclosures and poor corporate governance by insurers, and warned that with the code of corporate governance in place, it was not going to be business as usual.
He, therefore, directed the insurance industry regulator, NAICOM, to enforce compliance with the code of corporate governance.
He advised insurers to begin to address issues relating to poor underwriting practice, excessive risk appetite, lack of integrity, lack of autonomy and inappropriate pressure for short-term returns.
"These issues can be addressed by the boards and practitioners in the insurance sector as we all jointly strive towards a proper corporate governance regime. The Federal Government is committed to promoting corporate governance, which is one of its top priorities in an effort to combat corruption in the country
"It is important to mention that transparency, accountability, independence, fair treatment of stakeholders, management discipline and responsibility, count towards good governance and plays a major role in investors’ confidence and decision-making," the minister added.
He commended NAICOM’s efforts at stabilizing the industry in a post-consolidated era, and noted that the launch of the code of corporate governance would help to strengthen the industry.