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AM Best To Deploy Pandemic-Related Stress Test For Rated Insurance Firms

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By Sola Alabadan

AM Best is developing stress testing that it will conduct on its rated insurance companies’ balance sheets to gauge the impact of the COVID-19 virus fallout on their risk-adjusted capital levels, investment portfolios, reserve adequacy and other aspects of the risks borne by rated entities.

The COVID-19 virus is unique in its scope and complexity of potential losses, and the uncertainty regarding the near-term impacts further exacerbates the situation. Consequently, the direct and indirect effects of the outbreak may not be understood fully for some time. AM Best has conducted stress tests of this nature following previous then-unprecedented events, such as Sept. 11 or the Eurozone crisis. In the United States, current economic conditions are seen as more likely to affect the balance sheets of life/annuity insurers than those of property/casualty or health insurers, and on March 16, 2020, AM Best revised the U.S. life/annuity industry’s market segment outlook to negative.

AM Best believes the insurance industry is more resilient today to financial market downturns than it was during the 2008-2009 financial crisis, which put heavy attention on liquidity risk. At this time, rated companies are expected to be able to meet their commitments, despite the rapidly evolving situation. With these coming stress tests, access to liquidity, as well as the laddering and maturing of debt securities within the capital structures of insurance companies, will be additional areas of focus.

AM Best realizes that this is a difficult time for companies to produce additional information, and as a result, will delay by one month its deadline for the 2019 statement-year Supplemental Rating Questionnaire (SRQ) to May 1, 2020, through its Client Rating Portal. A questionnaire also will be issued to rated entities to determine how their operations have been affected by the pandemic, which lines of business they expect to be negatively impacted most or if they expect any overall assumptions or forecasts to change. AM Best also will seek results of each organization’s own stress tests, which are typically considered in the assessment of each rating unit’s enterprise risk management framework.

AM Best will provide future updates as warranted, and will monitor the financial impact on rated entities closely and provide updates on Credit Ratings as necessary.

AM Best is very cognizant of the health and safety of its employees, rated entities’ employees and all of its stakeholders, and has taken precautions such as use of video conferencing to mitigate any spread of the coronavirus.

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Niger Delta Militants Threaten To Attack Lagos, Abuja

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Niger Delta militants under the aegis of Supreme Egbesu Liberation Fighters have threatened to destroy infrastructure in Lagos State and Abuja .
In a video posted on Tuesday by AIT , members of the group were seen wearing masks and putting on a military uniform .
One of them , who read a statement on behalf of the group , lamented poor implementation of the amnesty programme in the region, saying , “ there are no schools , no potable water , no light , no hospital and access roads for our people to enjoy till date” .
He said , “ Over the years, the Niger Delta people have made frantic efforts to create an enabling environment but to our great dismay, the Nigerian government over the years has decided to handle the issues of the Niger Delta with kid gloves .
“ They have betrayed the struggle and have left the people to their fate ,” a member of the group read from a statement .
“ Rather, what is visible is the presence of military gunboat and the numerous military personnel dispersed to the Niger Delta who are killing, raping , and maiming the innocent people of the region.
“ Look at the security surveillance contract taking place in our region through the federal government these agencies in place have decided to shortchange our people . Now in our territorial waters , it is an Israeli company that is providing waterway security which we have competent hands with expert knowledge to manage.
“ Don ’t worry, because we are coming to destroy all your infrastructure in Abuja and Lagos . As a group committed to giving total liberation to our people , we will destroy the oil facilities both onshore and offshore in no distant time , we will be seen to be crippling the Nigerian economy. ”

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Ogun To Arrest Illegal Occupants Of Forest Reserve 

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The Ogun State government said it would soon start combing its forest reserve to arrest and prosecute illegal occupants .
The State Commissioner for Forestry , Tunji Akinosi , said this while responding to questions from journalists in Abeokuta , the state capital.
Akinosi said the government had written letters to the traditional rulers in the areas asking them to tell the illegal occupants to leave or be arrested .
He said, “ We have asked those that are illegally occupying our lands to leave , and now we are moving to the second stage of combing the areas ourselves and arresting those that are still residents in the reserve. ”
The Commissioner, while speaking on the depleted condition of the forest reserve, said, “ In the last 18 months , this administration has taken the bull by the horn in getting the Imeko and Aworo Forest Reserves back and running .
“ Unfortunately , the depletion did not start right now , it has been there and government this year alone had met twice with the Iledotun project coordinators and had taken 108 ,000 hectares of the forest reserve in Imeko and Aworo for regeneration .
“ We call it LND project , Land Degradation Neutrality project where you bring people of diverse nations to regenerate that place , and I am sure that between now and the next few months , you will see the work that would start there in reclaiming all the land that is there .”

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Police Misconduct Responsible For #EndSARS Protests —PSC

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The Chairman , Police Service Commission , Musiliu Smith , has attributed the # EndSARS protests to the misconduct of officers of the Nigeria Police Force.
Smith , a former Inspector -General of Police , decried the level of misconduct in the police force saying his office was always inundated with complaints from Nigerians .
The PSC chairman stated this at a retreat with the IG and his police management team , in Abuja on Tuesday .
Smith ’s statement contradicted claims by the Minister of Information and Culture , Lai Mohammed that the October protests were instigated by political and religious leaders .
He also said the demonstrations which were subsequently hijacked by hoodlums leading to widespread violence and looting , were aimed at overthrowing the Federal Government .
But puncturing these claims in his first public comment on the incident , the retired IG said, “ We are always having a lot of complaints from the members of the public against police officers. I believe that # EndSARS resulted from serious misconduct of some of our personnel .
“ I want to advise that we review the arrangements we are making for investigating such cases . Let ’s ensure that investigations are thoroughly conducted and whoever is the police officer that has been indicted will be punished according to the law . If we are doing that , some of the public complaints will go down . ”
Smith , who had been at loggerheads with the police leadership on the recruitment of police constables , also admonished IG Mohammed Adamu to work closely with the commission on the recruitment of credible Nigerians into the force.
Smith added that the number of court cases against the police was alarming , stressing that the force may not be able to pay the damages awarded against it .
In his remarks earlier, the IGP noted that the retreat was to bridge the communication gap and engender a better understanding and working relationship between the force and the police service commission .
The Attorney – General of the Federation and Minister of Justice , Abubukar Malami , who also spoke at the retreat, harped on the need for a harmonious working relationship among all the agencies of the government .

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