NAICOM strengthens aviation insurance, assures policyholders protection

Nike Popoola

The National Insurance Commission (NAICOM), has assured the aviation sector of its efforts in safeguarding the interests of policyholders in the insurance sector.

The Commissioner for Insurance/ Chief Executive Officer, National Insurance Commission, Olusegun Ayo Omosehin, spoke at the 4th CHINET AVIACARGO Conference 2024 on Thursday.

He said, “As a regulator in the financial services sector, our role is to ensure stability of the financial system, improve soundness of our operators in the insurance sector and safeguard policyholders’ interest.

“We are committed to giving adequate support to operators in the insurance sector and confidence to operators in the aviation industry in our effort to promote economic growth and development of our Nation, Nigeria.”

Giving more highlights on aviation insurance, he said some of the prescribed minimum prudential standards that guides activities in aviation underwriting in Nigeria include the following:

“The general requirements require that all aviation insurance business shall be conducted in accordance with extant insurance laws and other relevant regulations.

“Ensuring that establishment of underwriting terms and conditions for any aviation and its associated risks in Nigeria are the responsibility of an Insurer duly licensed to transact insurance business in Nigeria. This is without prejudice to an Insurer’s need to seek expert advice from its reinsurers for appropriate risk rating/pricing.

“All Underwriting firms are required to ensure that all aviation insurance transactions are conducted in compliance with Contract Certainty principles and requirements; amongst which all aviation insurance liability policies for any Nigeria domiciled risk are to conform to the minimum Passenger Liability Limit as required by the Nigerian Civil Aviation Authority.

“Every Insurer and/or Coinsurer shall, prior to accepting, signing and/or stamping any Aviation Insurance policy/schedule of coinsurers, carry out Risk Measurement and Exposure Assessment vis-a-viz its available capacity.”

The insurance regulator also said that the nature of insurance operations on the other side is also international due to the concept of spreading of risks.

“Aviation insurers transfer risks globally through Reinsurance, pooling and mechanisms. Insurance is the most favoured risk transfer mechanism to buffer crystallization of unforeseen events such as accident, fire, and air crashes, which have tested the resilience of the insurance industry,” he said.