NAICOM Engages Ernst & YoungFor Risk-Based Capital Rollout

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 appointment was formalised during a working meeting between NAICOM and EY in Abuja as part of the Commission’s ongoing efforts to strengthen the regulatory and supervisory framework of the insurance industry.

Speaking at the meeting, the Commissioner for Insurance, Olusegun Ayo Omosehin, said the Commission had been steadily transitioning the Nigerian insurance sector towards a risk-based supervisory regime and capital structure.

According to him, the strategic shift is designed to enhance the financial stability of insurance companies and strengthen protection for policyholders.

Omosehin noted that following the enactment of enabling legislation and the ongoing Minimum Capital Requirement (MCR) recapitalisation exercise, the Commission had intensified efforts to operationalise a Risk-Based Capital framework tailored to the realities of the Nigerian insurance market.

He explained that the implementation of the framework would be aligned with the completion of the current MCR exercise.

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

According to him, the exercises will provide the data required for recalibrating key parameters, enhancing stakeholder engagement and facilitating the issuance of the final RBC framework alongside detailed regulatory guidelines.

Under the engagement, EY will provide technical support to NAICOM to accelerate implementation of the framework, strengthen the Commission’s internal actuarial and supervisory capacity and ensure that the regulatory structure is robust, transparent and fit for purpose within the Nigerian insurance landscape.

Responding, representatives of EY reaffirmed the firm’s commitment to delivering the assignment as a priority engagement.

The firm pledged to work closely with NAICOM and other industry stakeholders to develop a practical and implementable Risk-Based Capital framework, as well as the supporting tools required for effective execution.

The Risk-Based Capital framework is expected to align capital requirements with the actual risk profiles of insurance companies, a move regulators believe will promote a more resilient, competitive and sustainable insurance industry.

The initiative also forms part of NAICOM’s broader agenda to strengthen governance, improve risk management practices and enhance confidence in the sector.