“Under these circumstances, foreign direct investment has been of little benefit to the Ghanaian market, contrary to the expectations of the Insurance Act of 2006 (Act 724), which seeks to create a level playing field for all insurance and reinsurance companies in order to encourage growth of FDIs in the insurance sector.
“The presence of foreign companies has had some undesirable effects, and I urge all foreign investors in the insurance industry to conduct their operations in a manner that will optimise the benefit of foreign direct investment for both parties,” she said.
Mrs. Kyiamah was speaking at this year’s two-day educational conference organised by the West African Insurance Companies Association (WAICA) on the theme “Harnessing the Effects of Foreign Direct Investment for the Development of the Insurance Industry in West Africa”, in Accra.
She said NIC is of the view that in order to increase the inflow of FDIs, there must be a regulatory and supervisory system that will address the increase in presence of insurance groups and financial conglomerates, as well as financial convergences.
“There is an urgent need for supervisors in the West African sub-region to increase their collaborative efforts to ensure that regulated entities are effectively supervised for protecting the interests of policyholders.
“This will also ensure that the insurance industry in the West African sub-region remains stable with minimised risk of contagion among countries, while reducing supervisory gaps and unnecessary supervisory duplications,” she noted.
Mrs. Kyiamah suggested that FDI’s should not only be seen as a source of capital for the growth and expansion of the insurance industry in the country, but also as a tool for pushing the technical knowhow and knowledge base of industry players so as to bring international best practices to bear within the sector.
Touching on government’s call to insurance companies to target the informal sector, the Commissioner said NIC supports the development of micro-insurance products for the informal sector with a view to increasing insurance infiltration in the country.
“Provisions on micro-insurance have been included in our new draft, which is expected to be passed into law by Parliament in 2013.
“The implementation of these provisions is expected to help increase insurance access to a significant percentage of the population, and thus help to create wealth while reducing poverty in the country,” she noted.