NAICOM boss inaugurates NAS-DRC committee on standard rate for insurance contracts

The Commissioner for Insurance/CEO National Insurance Commission (NAICOM), Olorundare Sunday Thomas has inagurated the Nigerian Actuarial Society Discount Rate Committee (NAS-DRC).

Speaking during the event, he said am pleased to welcome you to the inaugural meeting of the Nigerian Actuarial Society Discount Rate Committee (NAS-DRC).

The NAS-DRC is constituted as a standing committee to support the setting of a standardized basis of determining discount rate factors for use by the insurance industry and other stakeholders in the financial services sector, particularly in the implementation of the International Financial Reporting Standard 17 (IFRS 17), Insurance Contracts.

The membership of the NAS-DRC has been suitably drawn from representatives of NAS, NAICOM, Actuarial representatives of Audit Firms, as well as Resident Actuaries of Insurance Operators (with annuity business). The President of NAS and a representative of NAICOM (not below the rank of a Director) will serve as Chairman and Co-Chairman respectively, while the NAS shall provide the Secretariat.

It is apparent the role of Actuaries in the implementation of IFRS 17 cannot be overemphasised, likewise the need for credible, prudent, consistent and sustainable discount rate devoid of possible manipulation by different stakeholders if left to determine same for individual company’s use.

Hence, the objectives of the NAS-DRC includes: i. To determine the risk-free yield curve for use by the insurance industry; and ii. To provide commentary on any market movement that might impact on the determination of the risk-free yield curve. It is thus my sincere expectation that the inauguration of the NAS-DRC will no doubt enhance accountability, prudence and comparability in financial reporting and thereby support the stability in the Nigerian financial system. I am hopeful that the deliberations and activities of the NAS-DRC will bring about the desirable impact for the Nigerian financial system. Note also that the terms of reference remain as earlier circulated to members.

I wish to conclude my remarks by thanking all nominated members for accepting to serve on this commendable task. The insurance industry acknowledge your individual and collective sacrifices. I have the pleasure to inaugurate the NAS-DRC and I thank you for your attention. I wish you all successful deliberations.