New Bill To Improve Insurance Service Delivery In The Offing

Lydia-Bawa PixThe National Insurance Commission (NIC) is working on a new bill to provide the needed legal platform for effective implementation of risk-based supervision, Ms Lydia Lariba Bawa, Insurance Commissioner has said.

She said the proposed legislation is intended to establish an appropriate risk management control function which would include internal audit, risk management, and actuarial and compliance functions.

Ms. Bawa said these when the Ghana Insurers Association (GIA) sworn in an 11-member executive to steer the affairs of the association for the next two years. It has Ivan A. Avereyireh, Managing Director of Ghana Life Insurance Company Limited (GIF) as president.

Ms. Bawa said the bill was one of the key initiatives embarked by the NIC to improve the efficiency of insurance service delivery and provide effective and sustainable solution to the challenge facing the industry.

She said the adoption of risk-based supervision would make it the duty of the board of directors and the senior management of every insurance company to identify, evaluate and manage the risks associated with the business of the company.

Ms. Bawa said work on the risk-based capital adequacy framework which links an insurer’s capital requirement to how effectively it manages risk is far advanced.

She said the NIC would issue a revised draft for final comment by the end of this week while the final frame work, which is expected to be issued by the end of July 2014, would take effect from the second quarter of 2015.

In addition, Ms Bawa said plans were underway to build the capacity of the Ghana Insurance College to provide hands on training to individuals who would handle the various control functions.

She noted that even though the insurance industry had been growing at an average rate of about 30 per cent per annum over the past six years, the penetration rate is still below 2 per cent.

Ms. Bawa said the industry was grappled with serious market conduct challenges such as undercutting and dissatisfactory claim management, which adversely affect the confidence and trust levels of the public and the insurance industry.

Mr Avereyireh, on behalf of the newly-elected executives, commended the past executives’ good performance and promised to work for the greater good of the insurance industry.

He said his major objective as the President of GIA was to improve insurance penetration in Ghana by increasing it from 1.5 per cent to 3 per cent and also work on the poor perception among the public about the insurance industry.

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