The National Insurance Commission (NAICOM) has inaugurated the Nigerian Actuarial Society Discount Rate Committee (NAS-DRC) to address some of the industry’s challenges and promote global accounting standards.
The committee will also ensure the implementation of the international financial reporting standards (IFRS-17) in the insurance contracts is fast-tracked. Speaking at the inauguration in Abuja at the weekend, the Commissioner for Insurance, Sunday Thomas, said the NAS-DRC was established to support the determination of standardised discount rate factors for use by the insurance industry and other stakeholders in the financial services sector. He said this is to help the implementation of the International Financial Reporting Standard (IFRS 17) for underwriting companies in the sector.
The commissioner explained that the objectives of the NAS-DRC will include determining the risk-free yield curve for the insurance industry and providing commentary on market movements that may impact the risk-free yield curve determination.
“The inauguration of the NAS-DRC is expected to enhance accountability, prudence, and comparability in financial reporting, thereby supporting the stability of the Nigerian financial system,” he said.
Thomas welcomed the NAS-DRC, which comprises representatives from the Nigerian Actuarial Society (NAS), NAICOM, actuarial representatives from audit firms and resident actuaries of insurance operators involved in the annuity business.
He said NAS will provide the secretariat for the committee, while its president will serve as the chairman, adding that a representative from NAICOM, not below the rank of a director, will serve as the Co-Chairman.
The commissioner emphasised the crucial role of actuaries in implementing IFRS 17 and the need for a credible, prudent, consistent, and sustainable discount rate that is not subject to manipulation by different stakeholders.
He expressed optimism that the committee’s deliberations and activities will have a positive impact on the country’s financial system, even as he thanked the nominated members for accepting the task and acknowledged their individual and collective sacrifices.
Thomas reaffirmed that NAS-DRC is expected to work diligently to fulfill its terms of reference and contribute to advancing financial reporting standards in Nigeria.
