NIC frowns on reinsurance premium repatriation …US$40m transferred in 2019

Justice Yaw Ofori, Commissioner NIC

The National Insurance Commission (NIC) has shown concern over overseas transfers of reinsurance premiums out of the country.

Dr. Justice Yaw Ofori, Commissioner NIC, revealed that almost US$40million left the shores of Ghana in 2019.

“This has a negative impact on our cedi and the local economy,” the Commissioner lamented. He pronounced this at the 11th Ghana Reinsurance Cedants Awards held in Accra last week.

He therefore entreated all insurers to exhaust local capacity before any recourse to overseas reinsurance, so as to reduce premium flight and harness resources needed to develop the country.

Though the Commission is enjoined by the Insurance Act, 2006, to approve all reinsurance arrangements, this is generally aimed at developing the sector since it promotes a system wherein each insurer has access to risk and premium emanating from the local market.

Hence, to ensure local capacity is fully utilise before any recourse to overseas reinsurance. The Commission grants approval for all overseas reinsurance premium and risks transfers in both treaty and facultative covers.

In instances where the local market is unable to underwrite a risk, a special dispensation is granted for the entire risk and appropriate premium to be placed outside the Ghanaian insurance market. The Commission is still exploring ways to increase local capacity that will make this happen.

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