The National Insurance Commission on Wednesday, July 12, inaugurated the Nigerian Actuarial Society Discount Rate Committee (NAS-DRC) to support the setting of a standardised basis of determining discount rate factors insurance contract.
The Commissioner for Insurance Sunday Thomas explained that the standing committee is to support the setting of a standardized basis of determining discount rate factors for use by the insurance industry and other stakeholders in the financial services sector, particularly in the implementation of the International Financial Reporting Standard 17 (IFRS 17), insurance contracts.
The membership of the NAS-DRC has been suitably drawn from representatives of NAS, NAICOM, Actuarial representatives of Audit Firms, as well as Resident Actuaries of Insurance Operators (with annuity business). Setting the operational hierarchy, Thomas said 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 shall provide the Secretariat.
Citing the staunch role of actuaries in the implementation of IFRS 17 and tagged to this he stated, is the need for credible, prudent, consistent and sustainable discount rate devoid of possible manipulation by different stakeholders Hence, the objectives of the NAS-DRC 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.
“It is thus my sincere expectation 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,” Thomas stated.