NAICOM Engages EY On Risk-based Capital Framework

The National Insurance Commission (NAICOM) has appointed global professional services firm Ernst & Young (EY) as consulting actuary to support the finalisation and implementation of Nigeria’s Risk-Based Capital (RBC) framework.

The development was disclosed by the commission following a working meeting between NAICOM and EY in Abuja as part of ongoing efforts to implement a risk-based capital regime for the country’s insurance sector.

Speaking at the meeting, the Commissioner for Insurance, Olusegun Ayo Omosehin, said the commission had continued to advance the transition of the Nigerian insurance industry towards a risk-based supervisory and capital framework.

According to him, “This strategic shift is aimed at strengthening financial stability and enhancing policyholder protection across the industry.”

Omosehin explained that NAICOM had intensified efforts to operationalise the RBC framework following the enactment of relevant legislation and the ongoing Minimum Capital Requirement (MCR) recapitalisation exercise within the industry.

He noted that the implementation of the new framework would be aligned with the completion of the current recapitalisation programme.

The commissioner added that the next phase of the project would involve Quantitative Impact Studies (QIS) and industry-wide data collection exercises in the coming weeks.

According to him, the exercises are expected to support the recalibration of key parameters, encourage broader stakeholder engagement and facilitate the issuance of the final framework alongside detailed regulatory guidelines.

Under the arrangement, EY is expected to assist the commission in accelerating implementation efforts, strengthening internal technical capacity and ensuring that the resulting regulatory framework is transparent, robust and suitable for the Nigerian insurance market.

Responding, EY pledged its commitment to delivering the assignment as a priority project and promised to work closely with NAICOM and industry stakeholders.

The firm said the collaboration would focus on developing a practical and implementable RBC framework as well as the supporting tools required for its effective execution.