By BISI OLADIPO
Bala Zakariaya’u, chairman of the panel set up by the federal government to investigate the activities of Emmaneul Chukwulozie, the suspended commissioner for insurance, must have heaved a sigh of relief last week when his panel submitted its report to the ministry of fiancé.
The institution of the panel was informed the need to investigate the complaints, allegations and accusations made against Chukwulozie. Terms of reference for the panel included the investigation of alleged non-compliance with circulars and directives on policy implementation and disregard for due process, collection, allocation and investment of insurance levy and statutory funds, and to find out whether authorization was obtained for any action related to it, allegations of financial impropriety in the award of contracts for the Vehicle Insurance Sticker, VISER, and look into petitions pending before the Economic and Financial Crimes Commission and the Independence Corrupt Practices and other related Offences Commission.
Though the panel has completed and submitted its report to the ministry, operators in the industry are complaining that the indefinite suspension order is affecting their daily business, Augusta Maduekwe, an underwriter in Benin City, decrying the ongoing development in the risk-bearing industry, says that it is negatively affecting their transactions. According to her, insurance business is not moving as expected. Describing the situation as unfortunate, she says, “It is painful that the confidence gained by the industry during the just concluded recapitalization exercise is gradually going down the drain. If our business is moving at the tempo it operated during the exercise when both local and foreign investors were putting their money for the recapitalization of insurance companies, the industry should be bubbling with activities now. But this is not happening”, she concludes.
Oloyede Oyewole an insurance broker, attributes the lull in business to the ‘let’s wait and see’ attitude of the public to ongoing developments in the industry. He explained to the magazine that though it is difficult to quantify the amount of money the industry is losing, “there is a drop in demand for insurance products because the insuring public is not sure of what the panel’s finding will be and the action federal government will take concerning it”, Oyewole says.
Apart from the operator’s complaints, the supervisory responsibilities of the commission is in limbo too as activities seem to have slowed down at the National Insurance Commission, NAICOM, head office in Abuja. The implementation of various sections of the Insurance Act 2003 which ought to have commenced are yet to take off. This can be seen in the recent collapse of the three-storey building at Ojuelegba area of Lagos recently. Section 65 of the Act mandates compulsory insurance of such buildings while still under construction. The collapsed building which was formerly a one-storey building was raised to three floors within two weeks. Investigations by the magazine reveal that the building was not insured by the developer who is currently on the run. If the Act is enforced, the owner of the building, if convicted, is liable to a fine of N250, 000. Meanwhile, Lagos State government has seized the affected plot of land.
The need for the industry to increase its tempo of business transactions cannot be over-emphasized in view of the large public investment in the industry which was put at over N200 billion after last recapitalization exercises. The operators are worried because of the challenges of post-consolidation confronting them. According to Oladipo Bailey, former commissioner for insurance, “There is going to be a lot of pressure on insurance chief executives by the investors over returns on their investments. They need to generate enough business and if they don’t, they stand to be sacked because many investors will withdraw their money”. A lot of premium income is expected from the implementation and enforcement of the Insurance Act 2003 which is believed to also increase awareness for the business. If this is done, the gains of recapitalization will be numerous for the industry. He adds, “I have continued to say that the benefit of the current recapitalization is not in the short-term because it is for the future. Practitioners have a lot of work to do”, Bailey added.
Indeed, the quick release of the report of the people probe panel will go a long way in infusing stability into the insurance industry.
