The National Insurance Commission (NIC) of Ghana, as part of its risk-based supervisory framework, has issued a risk-based solvency and capital adequacy framework to improve the capitalization of industry players, says Commissioner of Insurance Lydia Lariba Bawa.

The framework, which was introduced in December 2014, requires insurance companies to meet new minimum capital requirements, new capital adequacy ratios and as well use the prescribed methodologies to calculate their technical provisions.

Speaking at the launch of RegencyNem Insurance Ghana Limited here over the weekend, Bawa said although many companies had fully met the requirements, only Regency Nem achieved this through a merger.

She said apart from the issue of capitalization, the NIC also required insurance companies to implement effective corporate governance and risk management strategies to improve efficiency and profitability.

The Commissioner said the corporate governance and the risk management framework required insurance companies to establish control functions such as internal audit, risk management and compliance to improve risk mitigation.

Bawa said Ghana’s insurance sector as at December 2015 recorded a gross premium of 1.5 billion cedis and total assets of more than 3.0 billion cedis (one US dollar = about 13.78 cedis). Although this represents a significant growth over the previous years’ figures, it was still insignificant in terms of contribution to Ghana’s gross domestic product (GDP), she noted.