Eddie Efekoha, Chairman, Nigerian Insurers Association (NIA) says the insurance industry in West Africa needs uniform regulation to create standard for insurance market across member states in West Africa, promote technical knowledge sharing amongst member state underwriter and regulators, standardise certain insurance product package and benefits and promote confidence and business sharing or exchange among players within the sub region.
Efekoha said in a paper he delivered at the 2017 WAICA conference in Banjul, The Gambia that other benefits include need to increase the existing low level penetration, have a harmonised regulatory standard, reduce premium flight outside the region and need to have an insurance framework to support regional business transactions
He said however that a harmonied regulatory regime in the region could face challenges due to
differences in the soundness of national macroeconomic and financial sector policies, nations are at different levels in the development of public infrastructure, effectiveness of market discipline and efficiency in financial markets differs within the region, absence of a single currency, governance structure of the various national regulatory system are not the same, state of development of the legal systems are at various levels and differences in level of technological growth.
“The insurance sector represents a significant part of the financial system and plays an important role in the economy. Regional business walls in the supply of insurance products are increasingly being broken down, institutions and individuals may want to leverage arbitrage opportunities hence the need for regulation. Regulation of insurance business in the West Africa sub region is largely underdeveloped. There are basic differences in insurance supervisory standards within the sub-region.”
Efekoha said the objectives of insurance regulation includes minimising and where possible prevent anything that routinely causes insurers to go out of business and unable to pay claims, prevent unfair and deceptive policies and practices since insurance contracts promise to make certain payments under certain conditions at some point in the future, ensure that adequate information are available to consumers of insurance products and to encourage the availability of insurance products that have been made compulsory.
He recommended strengthening the individual countries’ regulatory structure through total autonomy,
ensure financial independence of the regulatory system in each of the countries within the sub-region while regulatory institutions should build the needed human capacity for effective market surveillance.
“There must be deliberate efforts to foster relationship within the sub region financial sector. Trade Associations must be strengthened to play a collaborative role in the harmonisation process. Technical capacity requirement amongst member states must be standardised. Build on the ECOWAS Brown Card System. Borrow a leave from the francophone countries, already have a harmonised regulatory framework and need to build African market for African. “