NAICOM Inaugurates Discount Rate Committee
By Patience Ikpeme
The National Insurance Commission (NAICOM) has inaugurated the Nigerian Actuarial Society Discount Rate Committee (NAS-DRC).
The Standing Committee will support the establishment of a standardized basis of determining discount rate factors to be used by the insurance industry and other stakeholders in the financial services sector.
Standardizing discount rate factors has become necessary particularly in the implementation of the International Financial Reporting Standard 17 (IFRS 17), Insurance Contracts.
Speaking at the inauguration ceremony in Abuja, the Commissioner for Insurance Mr. Olorundare Sunday Thomas said “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” cannot be overemphasized.
The objectives of the NAS-DRC the Commissioner for Insurance noted includes: to determine the risk-free yield curve for use by the insurance industry; and to provide commentary on any market movement that might impact on the determination of the risk-free yield curve.
Olorundare Sunday Thomas was optimistic 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”.
The membership of the NAS-DRC has been drawn from representatives of Nigerian Actuarial Society (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 will provide the Secretariat.
