Ghana’s insurance regulator, the National Insurance Commission (NIC), has reportedly introduced a new solvency regime for local insurers and reinsurers to comply with.

According to Nigeria’s The Guardian newspaper, a directive by the commission explained that the new solvency margin was necessitated by worldwide requirements to comply with international standards. The solvency framework takes effect from 1 January 2015.

The scope of the new solvency framework reportedly covers capital resources, capital adequacy requirements, solvency control levels, investments, and technical provisions, valuation of assets and liabilities and financial condition reports.

Lydia Lariba Bawa, NIC’s commissioner of insurance, reportedly said the new solvency framework aims to ensure that a risk sensitive approach is adopted in assessing the solvency of insurance companies based on the size, nature and complexity of operations of the company.

The solvency regime is also said to affect Nigerian insurers operating in Ghana including Equity Assurance, WAPIC, Regency Alliance, IEI Ghana and NEM Insurance.

While the minimum solvency capital requirement applicable to an insurer is reportedly GHS 3m ($934,615) all insurance and reinsurance companies are required to comply with the minimum capital requirement of GHS 15m by 31 December 2015.

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All insurance and reinsurance companies are also reportedly required to comply with the target capital adequacy ratio of at least 130% by 31 December 2015, 140% by 30 June 2016 and 150% by 31 December 2016.