Economy

NAICOM Unveils Strategic Plan for Insurance Reform

Published

4 years ago

07/06/2021

By Adedapo Adesanya

The National Insurance Commission (NAICOM) has rolled out its three-year strategic reform (2021-2023) that will see the transformation of the insurance sector.

The commission said the starting point of the reform was to return operating firms to liquidity status by ensuring that they restructure their balance sheets so that those that currently rely on assets that they can hardly turn to cash would effect a major turnaround in their operations and run their business based on cash flow instead of fixed assets.

According to the commission, it has already started this through expert advice on owners of various insurance firms in order not to repeat or face some challenges it had in the past.

For instance, it noted that firms exceeded the maximum level of investment in real estate and are now facing a cash crunch and could not easily turn their assets to cash to keep afloat in business.

It further said it is strictly guiding operators to ensure that going forward none exceeds the 25 per cent maximum investment in the real estate sector.

Making the disclosure recently, NAICOM’s Director of Supervision, Mr Thompson Barineka, who was speaking on behalf of the Commissioner for Insurance, Mr Sunday Thompson, said that most of the firms currently regarded as weak were considered so because they could not quickly turn those assets into cash and continue to discharge their responsibilities to the public.

Mr Thomas said this being the case, the agency, having accomplished the five-year strategic plans it had set for itself, is now embarking on a three-year reform.

This new reform is aimed at positioning the commission as a globally competitive regulator whose functions are compliant with global best practices and whose supervisory roles support strong insurance institutions that can stand the risks of other economic operators and meet the prevailing needs of the insuring public.

The reforms, according to Mr Thomas, rest on five strong pillars namely: entrenching effective and efficient service delivery; ensuring safe, sound and stable insurance sector; adequately protecting policyholders and public interest; improving trust and confidence in the insurance sector; encouraging innovation, and promotion of insurance market development.

According to him, the reform also gears towards ensuring absolute trust on the commission through its promotion of insurance market development tailored towards improving the scope of internal rule-base to a new risk-based supervision approach using its new integrated governance management system.

He further noted that some unexpected occurrences necessitated the need of the reforms, considering the fact that since the development of the last strategic plan which lasted between 2016 – 2020, there have been various events such as the COVID-19 pandemic, the #EndSARS protests, and the rise in kidnappings, armed banditry, communal tensions and conflicts, which have impacted on the activities and initiatives of the commission.

According to him, these events have ushered in the new normal hence shaping how the industry conducts its business going forward and the corresponding regulatory response.

He said this has also created the need to prepare the workforce for the new work order, protection of policyholders, improving human capital, leveraging on technology and creating alternative channels of insurance distribution to stimulate productivity.

He further said NAICOM would also ensure periodic review and performance monitoring of the plan within its life span bearing in mind the pandemic.

He noted that within the first year of his administration, stability has been achieved within the commission and the entire industry with staff welfare at the front burner.

He also noted that his administration has been able to issue licenses to five insurance firms in the category of three life insurance, one general insurance and one reinsurance operator.

Mr Thomas said before his tenure, the last reinsurance firm licensed in the country was 32 years ago while the last insurance firm was licensed 10 years ago.

The NAICOM boss said in line with the three-year strategic reforms, his administration saw the need to bring in new life insurance operators because, in today’s economy, one area driving the flow of funds to the industry is life business.

“Why South Africa is dominating insurance market in Africa is because of its strength in the life insurance business.

“Today in Nigeria, the contributory pension asset is in the neighbourhood of over N12 trillion, it is expected that some of these funds will find their ways to the insurance sector but at present, insurers are still scratching business on the surface,” he added

Economy

FAAC Disburses 1.727trn to FG, States Local Councils in December 2024

Published

19 hours ago

14/12/2024

Modupe Gbadeyanka

By Modupe Gbadeyanka

The federal government, the 36 states of the federation and the 774 local government areas have received N1.727 trillion from the Federal Accounts Allocation Committee (FAAC) for December 2024.

The funds were disbursed to the three tiers of government from the revenue generated by the nation in November 2024.

At the December meeting of FAAC held in Abuja, it was stated that the amount distributed comprised distributable statutory revenue of N455.354 billion, distributable Value Added Tax (VAT) revenue of N585.700 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.046 billion and Exchange Difference revenue of N671.392 billion.

According to a statement signed on Friday by the Director of Press and Public Relations for FAAC, Mr Bawa Mokwa, the money generated last month was about N3.143 trillion, with N103.307 billion used for cost of collection and N1.312 trillion for transfers, interventions and refunds.

It was disclosed that gross statutory revenue of N1.827 trillion was received compared with the N1.336 trillion recorded a month earlier.

The statement said gross revenue of N628.972 billion was available from VAT versus N668.291 billion in the preceding month.

The organisation stated that last month, oil and gas royalty and CET levies recorded significant increases, while excise duty, VAT, import duty, Petroleum Profit Tax (PPT), Companies Income Tax (CIT) and EMTL decreased considerably.

As for the sharing, FAAC disclosed that from the N1.727 trillion, the central government got N581.856 billion, the states received N549.792 billion, the councils took N402.553 billion, while the benefiting states got N193.291 billion as 13 per cent derivation revenue.

From the N585.700 billion VAT earnings, the national government got N87.855 billion, the states received N292.850 billion and the local councils were given N204.995 billion.

Also, from the N455.354 billion distributable statutory revenue, the federal government was given N175.690 billion, the states got N89.113 billion, the local governments had N68.702 billion, and the benefiting states received N121.849 billion as 13 per cent derivation revenue.

In addition, from the N15.046 billion EMTL revenue, FAAC shared N2.257 billion to the federal government, disbursed N7.523 billion to the states and transferred N5.266 billion to the local councils.

Further, from the N671.392 billion Exchange Difference earnings, it gave central government N316.054 billion, the states N160.306 billion, the local government areas N123.590 billion, and the oil-producing states N71.442 billion as 13 per cent derivation revenue.

Economy

Okitipupa Plc, Two Others Lift Unlisted Securities Market by 0.65%

Published

1 day ago

14/12/2024

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.65 per cent gain on Friday, December 13, boosted by three equities admitted on the trading platform.

On the last trading session of the week, Okitipupa Plc appreciated by N2.70 to settle at N29.74 per share versus Thursday’s closing price of N27.04 per share, FrieslandCampina Wamco Nigeria Plc added N2.49 to end the session at N42.85 per unit compared with the previous day’s N40.36 per unit, and Afriland Properties Plc gained 50 Kobo to close at N16.30 per share, in contrast to the preceding session’s N15.80 per share.

Consequently, the market capitalisation added N6.89 billion to settle at N1.062 trillion compared with the preceding day’s N1.055 trillion and the NASD Unlisted Security Index (NSI) gained 19.66 points to wrap the session at 3,032.16 points compared with 3,012.50 points recorded in the previous session.

Yesterday, the volume of securities traded by investors increased by 171.6 per cent to 1.2 million units from the 447,905 units recorded a day earlier, but the value of shares traded by the market participants declined by 19.3 per cent to N2.4 million from the N3.02 million achieved a day earlier, and the number of deals went down by 14.3 per cent to 18 deals from 21 deals.

At the close of business, Geo-Fluids Plc was the most active stock by volume on a year-to-date basis with a turnover of 1.7 billion units worth N3.9 billion, followed by Okitipupa Plc with the sale of 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 million.

In the same vein, Aradel Holdings Plc remained the most active stock by value on a year-to-date basis with the sale of 108.7 million units for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with a turnover of 297.3 million units worth N5.3 billion.

Economy

Naira Trades N1,533/$1 at Official Market, N1,650/$1 at Parallel Market

Published

1 day ago

14/12/2024

Adedapo Adesanya

By Adedapo Adesanya

The Naira appreciated further against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N1.50 or 0.09 per cent to close at N1,533.00/$1 on Friday, December 13 versus the N1,534.50/$1 it was transacted on Thursday.

The local currency has continued to benefit from the Electronic Foreign Exchange Matching System (EFEMS) introduced by the Central Bank of Nigeria (CBN) this month.

The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including the rebound in the value of the Naira across markets.

The system instantly reflects data on all FX transactions conducted in the interbank market and approved by the CBN.

Market analysts say the publication of real-time prices and buy-sell orders data from this system has lent support to the Naira in the official market and tackled speculation.

In the official market yesterday, the domestic currency improved its value against the Pound Sterling by N12.58 to wrap the session at N1,942.19/£1 compared with the previous day’s N1,954.77/£1 and against the Euro, it gained N2.44 to close at N1,612.85/€1 versus Thursday’s closing price of N1,610.41/€1.

At the black market, the Nigerian Naira appreciated against the greenback on Friday by N30 to sell for N1,650/$1 compared with the preceding session’s value of N1,680/$1.

Meanwhile, the cryptocurrency market was largely positive as investors banked on recent signals, including fresh support from US President-elect, Mr Donald Trump, as well as interest rate cuts by the European Central Bank (ECB).

Ripple (XRP) added 7.3 per cent to sell at $2.49, Binance Coin (BNB) rose by 3.5 per cent to $728.28, Cardano (ADA) expanded by 2.4 per cent to trade at $1.11, Litecoin (LTC) increased by 2.3 per cent to $122.56, Bitcoin (BTC) gained 1.9 per cent to settle at $101,766.17, Dogecoin (DOGE) jumped by 1.2 per cent to $0.4064, Solana (SOL) soared by 0.7 per cent to $226.15 and Ethereum (ETH) advanced by 0.6 per cent to $3,925.35, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.