The Central Bank of Liberia (CBL) says that they will remain committed to reforming the insurance sector as part of its responsibility in ensuring the safety and soundness of the financial system in the country.
According to CBL, they have issued a new Capital Requirement Regulation for the sector to be followed by several regulations intended to strengthen corporate governance, risk management, internal control, financial audits, licensing and other prudential standards for insurance companies operating in the country.
The statement said the ongoing assessment of insurance brokers and agents will be concluded and followed by the issuance of the appropriate authorization to those that met the CBL requirements.
As a further step towards strengthening the insurance sector, CBL said, it is important that the mandatory insurances as required by law, which include Marine and Compulsory Motor Vehicle Third Party Liability Schemes, are enforced.
This, according to Bank, will not only support the growth and development of the sector, but also strengthen the revenue-generating capacity of the government in the insurance sector.”
However, the CBL said, it will shortly commence restructuring the National Insurance Corporation of Liberia (NICOL), which has the potential to play a meaningful role in the economy with a modified mandate.
Presently, the statement said, insurance services are for the most part limited to large corporations, individuals and businesses mainly in Monrovia and consistent with its policy on financial inclusion.
The 2015 policy statement of CBL said they will work with insurance sector to extend services to broader clienteles, including micro-insurance services, which are on the rise in many developing countries.
The statement also said that the financial inclusion is regarded globally as an important development priority, which is being articulated by G-20, Alliance for Financial Inclusion Baseline Survey, which shows that Liberia has an unbanked population of almost 80 percent falling in the lowest quintile of exclusion.
“This lends credence to the importance of the work being done by CBL to help rural communities gain access to affordable financial services through the establishment of Rural Community Financial Institutions (RCFIs),” the statement added.
The statement indicated that with the establishment of the RCFIs, there is now at least one financial institution in each of the 15 counties; a marked improvement over the situation just a few years ago.
At the same time, the statement said the Board of Governors of the CBL has approved support for the establishment of additional RCFIs in Bong, Lofa and Nimba counties, and for additional capacity building for RCFIs especially in the area of training and information technology.
Counties that already have RCFIs, in collaboration with Afriland Bank is already participating in the payment of civil servant salaries in the leeward counties.
Meanwhile, the statement said CBL will strengthen the capacity of the National Apex of Village Savings and Loan Association (NAPEX), which is now at the forefront of enhancing livelihood opportunities and women economic empowerment.
The CBL will also assist the Liberian Credit Union National Association (LCUNA) in its push towards sustainability and standardizing credit union operations in Liberia, the statement declared.
“The new credit union regulations, which are intended to strengthen the institutional and operational structures of these organizations, will be finalized soon and published,” the policy statement of CBL disclosed.