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| Chief Yemi Soladoye |
A dinner organised for members of the Governing Board of the
National Insurance Commission (NAICOM) and selected chief executives of
insurance formations was hijacked by trade groups in the industry to make
several demands on the commission and government. Nnamdi Duru who was at the
dinner reviews some of their demands.
Following the appointment of the Hon. Chibudom Nwuche led
Governing Board of the National Insurance Commission (NAICOM) by the Federal
Government, the commission convened a meeting between its board members and
selected chief executives of insurance formations.
The meeting was part of efforts to enable the board members
know more about some of the developments in the industry and get first hand
information and feedback on insurance regulations from operators.
Different trade groups in the industry lent their voices to
discussions on how to grow the insurance market with a view to making insurance
contribute meaningfully to the country's Gross Domestic Product (GDP) and
presented several demands on NAICOM and government.
Their demands included: bail out for insurers; review of
restrictions on investments; and recognition of offshore investment; as well as
protection of policyholders, particularly clients of some liquidated companies
life companies. Insurers Demand Bailout
One of the key demands by insurance and reinsurance
companies in the country was that Federal Government should extend bail-out to
them in the spirit of recent interventions in the different arms of the finance
industry.
They observed that it amounts to injustice and insensitivity
on the part of government for it to bail out intermediaries in the Nigerian
Stock Exchange (NSE) including stock brokers and banks who lost little
resources to the market crash leaving out insurers who suffered huge losses in
their capacity as corporate investors and risk bearers.
"Many insurance companies are still groaning from the
losses suffered as a result of the crash in the stock market. Recovery has been
difficult and returning to profit a herculean task. We appeal to the Federal
Government to look towards the direction of insurers in this regard," the
Chairman of Nigerian Insurers Association (NIA), Mr. Remi Olowude said.
Encroachment on Insurance Business NIA also asked the
Federal Government to stop the encroachment on insurance businesses by some of
it agencies, particularly those trying to provide insurance protection to
aviation passengers and public liability for nuclear risks. The association
lamented previous encroachments including the extraction of workmen's
compensation insurance, severance of pension business and transfer of health
insurance business to the National Health Insurance Scheme (NHIS).
It alleged that "NCAA, under the Ministry of Aviation,
is planning to establish insurance fund for aviation passengers'
liability," saying all over the world, aviation passengers' liability is
subject to international conventions and the risks are covered by conventional
insurance policies and Nigeria would not be an exception.
"Similarly, the Nuclear Agency wants to establish fund
for nuclear damage insurance, instead of seeking conventional insurance cover
for the risks which are covered in international insurance market,"
Olowude said.
Restrictions on Investment The insurers' association also
called for a review of restrictions on investment to ensure safe but adequate
returns to stakeholders for the viability of the industry. They want the
provisions of Insurance Act, 2003 and Regulation of Insurance Company
Investments amended to reflect modern realities.
"Investments on equities suffered losses in 2008 and
2009, yet insurers are expected to maintain the same proportionate level of
investment in prescribed sectors," they complained. The insurers equally
want a review of NAICOM's position on off-shore investment for the purpose of
solvency calculation and actuarial valuation. Currently, off-shore investments
are not recognised in the calculation of solvency margin for insurers.
Compulsory Insurances The essence of compulsory insurances
is to ensure that innocent victims of accidents and disasters are fully
compensated and to minimise economic waste in the society. The insurers
demanded that in addition to making compliance with group life assurance a
requirement for bidding for public sector contracts, NAICOM should prevail on
government to make compliance with compulsory third party motor insurance a
condition for contract bidding too.
They also prevailed on NAICOM to activate various laws
relating to Marine Insurance of refined petroleum products imported into the
country since the Insurance Act, 2003 provides that all imports into the
country must be insured with an insurance company registered in Nigeria.
"This law is only observed in the breach. We are
seeking enforcement of the Cabotage Act, 2003, review of the Insurance Act,
2003 and the Nigerian Oil Industry Content Development Act, 2010," NIA
insisted.
Statutory Deposits and Multiple Taxes NIA appealed to the
commission to review its policy on statutory deposit. The NIA chairman pointed
out that banks and other financial institutions do not keep part of their
capital with the Central Bank of Nigeria (CBN), lamenting that 10 per cent of
insurers' capital is lying idle at the apex bank.
"This fund could be used to grow the companies,
invested in other instruments for higher returns for the benefit of
stakeholders in the company as against keeping it in the CBN without any
agreement on interest payment," he appealed.
Insurance operators also want the Companies Income Tax
(Amendment) Act, 2007 revisited with a view to correcting the absurdities in
the provisions which made the statutes inimical to the growth and development
of insurance industry in addition to addressing the imposition of multiple
taxes on insurers by various tiers of government.
Review of Claim Procedures Led by Chief Yemi Soladoye, the
Insurance Consumers Association of Nigeria (INSCAN) asked NAICOM to look for
ways to better the lots of insurance consumers across the country.
He asked the commission to review aspects of insurance law
that allow an insurer up to six months to repudiate an insurance contract and
another six months to repudiate claims while an insured who paid premium for
the cover at the beginning of the contract and lost his only means of
livelihood, only car or his widow and children suffers untold hardships.
"NAICOM should as a matter of urgency issue market
conduct directives to its operators to bring the period for payment of our
claims to not more than 30 days. It should also give proper interpretation to
sec 70(c) of the act and note that there should really not be any outstanding
claim for more than 90 days in the books of any underwriter.
"This is the only way that NAICOM can claim success,
within the context of its duty, in the implementation of section 50(1) of the
Insurance Act 2003, Soladoye stressed.
Customers of Liquidated Life Companies Falling back on the
provision of Section 83(i) of the Insurance Act 2003, stipulates continuation
of the life assurance business of insurer in liquidation to be transferred as a
going concern, insurance consumers demanded to know the where about of their
investments in liquidated life insurance companies.
They cited the case of Spring Life Assurance where thousands
of our members have benefit advice of over two years not paid by the company
and Amicable Assurance whose policyholders are still looking for their life
savings 10 years down to reinforce their demands. They noted that out of the 23
companies that emerged as general business insurers post consolidation, 17 were
composite companies and queried "where are these life portfolios
transferred."
"NAICOM should mandate all the companies that acquired
or merged with others by 2007 to make uniform publications (at least four
times) to inform the public of the where about of their former underwriters. It
is only by so doing that NAICOM would be protecting the policyholders in
Nigeria in the manner that is most beneficial to them," INSCAN demanded.
The trade groups that attended the programme included:
Nigerian Insurers Association (NIA) representing all the insurance and
reinsurance companies in the country and the Nigerian Council of Registered
Insurance Brokers (NCRIB).
Also the Institute of Loss Adjusters of Nigeria (ILAN),
Risks and Management Society of Nigeria (RIMSON), Association of Registered
Insurance Agents of Nigeria (ARIAN) and the Insurance Consumers Association of
Nigeria (INSCAN) attended the dinner
Source Thisday
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