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Safeguarding national interest through insurance regulation

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Ghana’s

Insurance Guardian The National Insurance Commission is currently working on some of its most transformative projects to date, establishing a centralised policy database Writer: Jonathan Dyble | Project Manager: Josh Mann

n March 6 1957 the later followed by the State Insurance Republic of Ghana achieved Company of Ghana in 1962. independence from the Gradually the industry expanded in British empire, becoming the years following, with a further the first sub-Saharan African country 11 firms having been launched by 1971, to do so. whilst seven more were also set up Colonial rule was a defining period by 1976. throughout the continent’s history, “In the 1980s in particular, the with cultural norms from the western industry witnessed huge growth,” world having been enforced across says Justice Ofori, Commissioner of the region during the 19th and 20th Insurance at the National Insurance centuries. Commission (NIC) Ghana. British merchants continued to “The result was the advent of more expand their presence in Ghana during specialised insurance practices such these years, known then as the Gold as automobile insurance claims, and Coast due to the abundance of natural in light of this, there were growing resources situated across the region. requests that there should be an To protect the rising interests of independent regulatory agency to these merchants, the Royal ensure effective supervision of Guardian Enterprise the market.” was set up in 1924, Subsequently, the signifying the National Insurance beginning of Ghana’s Commission was insurance industry. established through Fast forward 30 the Insurance Law years to 1955 and of 1989 (PNDC Law the first local private 227), which was later Justice Ofori, insurance entity, the amended under the Commissioner of Insurance Gold Coast Insurance Insurance Act of 2006 Company, was established, (Act 724).

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An improved understanding

In the 29 years since its inception, the Commission has become of paramount importance to Ghana’s insurance industry. “The objective of the Commission is to ensure that the market is regulated, administered, monitored and controlled in the most effective way possible, both helping to uphold the policyholder’s interest and protect the industry itself,” Ofori explains. “Not only can we supervise the market, but we can provide it with some coherent direction.” However, such responsibility is not without its challenges.

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The growing capabilities and influences of technology have led to significant adaptations that NIC is coping with in the aim of remaining ahead of the curve. “It’s a tough one because technology is very dynamic, and it keeps on changing,” Ofori continues. “We know it’s extensive, but we have no option; we have to be proactive to ensure that we are keeping pace with any changes in the industry.” In doing so, the Commission is working to create a database of insurance policies to help consolidate an understanding of movements in the market.

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NATIONAL INSURANCE COMMISSION GHANA The NIC was established under Insurance Law 1989 (PNDC Law 227). Currently the Commission operates under Insurance Act 2006 (Act 724). It performs a wide spectrum of functions including licensing of entities, setting of standards and facilitating codes for practitioners. NIC is also mandated to approve rates of insurance premiums and commissions, provide a bureau for resolution of complaints, and arbitrate insurance claims when disputes arise. Alongside side these duties, the Commission advises the sector minister on policy formation and carries out public education programmes and activities. Through Act 724, NIC provides a strong regulatory framework for Ghana’s insurance industry.

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“The public will easily be able to access this database,” says Ofori. “We have recognised that the ability to verify the authenticity of a policy will be fundamental to the future of the industry and we have sought to address this. “I’m very optimistic that by this time next year we will have the database in place, and it’s really our priority right now.” In addition, NIC is currently collaborating with the World Bank in developing a claims database that will become a key internal material that will be utilised for years to come. With the Commission currently utilising mortality statistics from South Africa, the new database will substantially improve the national understanding of Ghana’s insurance market, helping to better analyse activities and reduce fraud.

The learning curve

In the face of rising innovation and industry 4.0, Ofori is quick to emphasise the importance of all aspects of industry education. Internally, for example, NIC runs extensive in-house training programmes for its employees, whilst also providing them with extra opportunities by working with global partners. “We send our staff all over the world, keeping them up to date with what is happening in the industry so that we can gain insight into new models and ways of operating,” Ofori states. “We want to increase penetration, and to do so, we need to educate people and improve their confidence.” In doing so, NIC’s staff are ably equipped to pass on expert and insightful knowledge to the rest of the Ghanaian population through a variety of methods. “We’re currently working with the police, ensuring that they get to grips with the insurance laws so that regulatory requirements can be better

We recognise the ability to verify policy authenticity will be fundamental to our industry’s future

enforced, and we’re also cooperating with the fire departments on Commission Fire Liability Insurance,” Ofori reveals. “Moreover, this year NIC has also provided five training sessions to board members, chief executive officers (CEOs), chief operations officers (COOs), chief finance officers (CFOs) and other executives of numerous companies completely free of charge. “We work closely with trade organisations such as the Ghana Insurance Brokers Association to ensure that the right information is reaching the right people,” he adds. “Whilst we recognise that we have to remain strict, relationships such as these are fundamental. It’s all about

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striking the right balance.” Operating in such an expansive and high-speed industry, it is difficult to say what the Commission will be working on next, but with the impending introduction of a claims database and a centralised directory outlining all modern insurance policies, it is certain that regulatory progress continues to be in the pipeline.

National Insurance Commission Tel: +233 302 238 300 / 1 info@nicgh.org www.nicgh.org

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