Insurance Commission moves to protect policy holders. Partners Kenya for effective regulation
The National Insurance Commission (NIC) has initiated moves to protect policy holders from insurance companies which come into the country to do business with ulterior motives.
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The NIC can now do due diligence on foreign companies which intend to expand their footprint in Ghana from the originating countries.
The commission has subsequently signed a memorandum of understanding (MoU) to that effect with Kenya.
In an interview, the Commissioner of the NIC, Ms Lydia Lariba Bawa, said protecting insurance policy holders was top on the agenda of the International Association of Insurance Supervisors (IAIS).
“What the International Association of Insurance Supervisors (IAIS) is doing is to encourage members to do this to be effective so that we can protect policy holders. We don’t have to wait for the company to go down first, before we move,” she said.
She added, “we try to ensure that the companies are financially sound at any particular time, so that if there is any red flag, we pick it up and then double up our regulatory roles and allocate resources to looking into that company to ensure that things are done right.”
Ms Bawa further explained that as a result of the partnership, the Kenyan Insurance regulators could tell if there was a problem with the company coming into Ghana and the NIC could quickly act on it.
Rippling effect
The Commissioner of the Insurance Regulatory Authority (IRA) Kenya, Mr Sammy Makove, in a separate interview said there was the need for collaboration due to the rippling effect that challenges on global companies could have on their local subsidiaries.
“The ripple effect will happen and it doesn’t matter where you are. Anything that happens in an insurance company in Kenya, can affect the financial services systems if it goes wrong, so there is the need to collaborate for effective regulation,” he said.
The MoU
A memorandum of understanding (MoU) has been signed between Ghana and Kenya to help the two countries leverage on their expertise to aid in the effective regulation of the insurance sectors.
The Commissioner of Insurance, Ghana, Ms Lydia Lariba Bawa, signed on behalf of Ghana, while the Commissioner of the Insurance Regulatory Authority of Kenya, Mr Sammy Makove, signed on behalf of Kenya.
The MoU would serve as a basis for cooperation, consultation and collaboration between the two institutions to facilitate the effective regulation of cross-border network and offshore subsidiaries in the insurance sectors of the two countries.
It will also make room for the timely provision of information on the financial position, compliance with the rules on solvency, money laundering/terrorist financing, risk mitigation, risk concentration, intra-group transaction on companies that would want to do business in any of the two countries.
The MoU is also expected to further strengthen collaboration among the two countries to help them know of occurrences in the respective economies.