By BISI OLADIPO
When Samuel Okoro was injured by a hit-and-run driver last year, he took care of himself, all the medical expenses included. Unknown to him, there is a provision at the National Insurance Commission, NAICOM, for victims of hit-and-run drivers. Like many other Nigerians, quite a large number of them. Okoro is not aware of the establishment of the security fund legally backed by NAICOM Decree No. 1 of 1997, from which victims are expected to be compensated by NAICOM.
“If the commission is up to its responsibilities, it is its duty to educate the public on the availability of such provision”, lamented Olumuyiwa Soderu, an accountant. For him, the commission owes Nigerians, especially the insuring public, the duty of enlightening them about its activities.
But this is not so. Creating effective awareness for the industry has been a daunting problem for the commission saddled with the functions of overseeing the effective administration, supervision, regulation and control of insurance business in Nigeria. In the past few years, NAICOM has failed to achieve this objective. The risk-bearing industry is bedeviled with problems like low patronage, non-settlement of claims by insurers, non-remittance of premium by brokers, malpractices by the operators (such as rate-cutting and buying of premium) among others. As a result, the growth of insurance business in Nigeria has been at a slow pace. Again, in spite of the existence of the insurance Act 2003, introduced with tougher penalties for defaulters, particularly in an effort to sanitize the industry, effective regulation of the activities of the operators has suffered setbacks. Investigations by the magazine show that till date, there are several provisions of the Act which are yet to be implemented and enforced, four years after it was signed into law by the former President Olusegun Obasanjo.
“it is very sad that the implementation of sections 64, 65, 68 and 72 of the Insurance Act 2003 has not commenced four years after it was signed into law by the federal government. The huge premium income insurance companies would have earned from this business cannot be imagined. It involves a lot of money”, Bayo Sadiq, an insurer says. Emmanuel Chukwulozie, former commissioner for insurance while in office, constituted two committees to develop modalities for the implementation of these sections in the insurance act and afterward released guidelines for them. This includes section 64 which takes care of compulsory insurance of buildings under construction that are more than two floors. Section 65 mandates insurance for public buildings and compulsory group life policy under Section 9(3) of the Pension Reform Act, 2005. Section 72 forbids any person from transacting insurance or reinsurer in respect of any life, assets, interest or other properties in Nigeria unless with a company registered by NAICOM. But nothing has been heard about these committees or their report since the day they were inaugurated till the sudden sack of Chukwulozie by the Federal government last May.
His removal from office led to the appointment of Muhammed Hussaini as the acting commissioner for insurance. During the short period, he conducted the re-verification of insurance companies as recommended by the Bala Zakariya’u panel set up by the federal government to probe the activities of the commission and the just concluded recapitalization exercise. Hussaini acted in this capacity till the end of July when Fola Daniel, former managing director of Globe Reinsurance, was announced as the new commissioner for insurance.
While insurance operators describe his appointment as a good development for the industry, they also insist Daniel must be ready to perform his duties and lead with firmness. The unfinished tasks of his predecessor, which include implementation and enforcement of the critical provisions of insurance Act 2003, consolidating the gains of the just concluded recapitalization exercise, creating awareness for insurance services and redeeming the unfavorable image of the industry, among others, need his immediate attention.
According to industry analysts, other burning issues he must attend to urgently, include looking into the rate of commission payable on the oil and gas insurance business, strict compliance with Section 9 of the Pension Reform Act of 2005 as well as the Nigerian content policy on oil and gas and fast-track signing into law the Motor Vehicle (Third Party) Amendment Bill that has been in the National Assembly since 2001.
The need for smooth regulation of the industry, according to Peju Ibironke, a policy holder, “calls for a good relationship between the commission and the various trade associations in the industry.” They are Nigerian insurers Association, NIA, Nigerian Council of Registered Insurance Brokers, NCRIB. Professional Association of Reinsurance Association, PRAN, Institute of Loss Adjusters of Nigeria, ILAN, Association of Registered Insurance Agents of Nigeria, ARIAN and Chartered Insurance Institute of Nigeria, CIIN.
Since the commission was established 10 years ago, four commissioners have been appointed, beginning with Oladipo Bailey in 1997. “The instability of helmsmen at the commission is not good for the industry”, says Okoro, who believes that unstable administration is an impediment to the growth of the industry. While Bailey stayed in office for seven years, Chukwulozie his successor served for two and a half years and Hussaini acted for only two months.
“How can you expect them to perform within such a short time? Do you want them to perform magic”? He queries.
However, to be able to contribute effectively to the Financial System Strategy, FSS 2020 global vision as a sub-sector of the nation’s financial sector, NAICOM needs to wake up to its responsibilities and ensure that the insurance industry becomes attractive to both the insuring public and investors to enhance growth and development.