General insurance Scrutiny( Monitoring) of Insurance Company by the Government

[Mataracy]

As a protection against insolvency and unfair treatment of policyholders, insurance regulation continues after the formation and licensing of an insurer. The basic idea of continual regulation is that most obligations of insurers extend years into the future and the state should provide supervision to see that the premises in the contract are fulfilled.

The government, therefore, exercises enormous control over many phases of the operations of insurers.

The scrutiny or monitoring process could draw extensively from regulations guiding the following areas: contracts and forms, rates, annual returns, records, expense limitation, reserves, solvency margins, statement of accounts, investment, trade practices, appointment of directors, chief Executives and managers, etc.

The scrutiny or monitoring exercise will reveal whether the conduct of insurance business by the insurer in line with the rules and regulations guiding such business actions. It will also identify companies that are not performing well, so that remedial actions can be appropriately taken.

 

[btaliat]

There are different ways government do monitor and regulating the activites of the insurance company. At times, they make some legislations against some of these insurance companies in order to protect citizens interest and most times, they listen to the complaints by the people that do patronize these insurance companies.

 

[Mandy96]

I believe this is important, if not, they will be running the business however they like which might be causing some discomfort to the clients and they could probably care less as long as they are making their income and profits. Like they say “it’s a dog eat dog world”