Thursday, 30 August 2012

Staff of National Insurance Commission (NAICOM) in an event in Calabar.

Staff of National Insurance Commission (NAICOM) in an event in Calabar.

Group photograph at the signing of MoU between National Insurance Commission (NAICOM) and Ghana's Insurance Commission

Fola Daniel, Commissioner for Insurance, Nigeria and Mrs. Nyamikeh Kyiamah, Commissioner for Insurance Ghana (centre) others a staffer of NAICOM and member of Ghana's Insurance Commission.

Fola Daniel, Commissioner for Insurance, Nigeria and Mrs. Nyamikeh Kyiamah, Commissioner for Insurance Ghana (centre) others a staffer of NAICOM and member of Ghana's Insurance Commission.

Commissioner for Insurance Fola Daniel and Mrs. Nyamikeh Kyiamah, Commissioner for Insurance, Ghana exchanging pleasantry at the signing of MoU

From left: Deputy Commissioner Technical National Insurance Commission (NAICOM) Ibrahim Hassan; Commissioner for Insurance Fola Daniel and Deputy Commissioner Finance and Administration George Onekhena at an insurance workshop in Calabar.

Managing Director Riskguard-Africa Nigeria Limited Yemi Soladoye

Commissioner for Insurance Fola Daniel

From left: Deputy Commissioner Technical National Insurance Commission (NAICOM) Ibrahim Hassan and Commissioner for Insurance Fola Daniel at an insurance workshop in Calabar.

'Over N60 b microinsurance opportunities unatapped'

'Over N60 b microinsurance opportunities unatapped'

Chuks Udo Okonta

Over N60 billion microinsurance opportunities are untapped by insurers the Managing Director Riskguard-Africa Nigeria Limited Yemi Soladoye, has said.
He said this at a workshop organised by the National Insurance Commission (NAICOM) for journalists in Calabar, adding that microinsurance remains the panacea for porverty eradication.
He urged insurers to develop products that suit the need of the public, adding that any product that does not take default into consideration would fail. He said most insurers sell products and not solution.
He noted that research has revealed that Micro Finance Banks (MFBs) in the country presently have over 20 million customers, adding that the customers are good prospects for microinsurance.
He said the problem of insurance is that most people lack education on how it operates, adding that it is worrisome that most operators recycle products developed by their counterpacts.
Soladoye said 90 per cent of insurance operators are confused about the difference between insurance education and advertorials, stressing that people do not buy insurance because they lack knowledge of the benfits it provides.

Insurers paid $30,000 to DANA clashed victims

Insurers paid $30,000 to DANA clashed victims
 Victims of Dana air clash have received $30,000 the Commissioner for Insurance Fola Daniel has said. He disclosed this in Calabar, adding that the balance $70,000 of the $100,000 would soon be paid. He noted that the National Insurance Commission (NAICOM) would ensure that the local insurers that underwrote the risks live up to expectation. Daniel noted that the sum assured of the risk was $350 million which comprises life and third party liability excluding the claims for the aircraft. He said families of those that died in the mishap have to present death certificates and certificate of administration before they would be paid the outstanding claims. Daniel noted that the No Premium No Cover would not deter the operators from paying the claims, adding that only legitimate claimants would be paid. He said: "Whether the co-insurers pay or not we would hold the lead insurer responsible and legitimate claimants would be paid adequately."

CIIN condemns proposed N5,000 note

Chuks Udo Okonta
The Chartered Insurance Institute of Nigeria (CIIN) has condemned the proposed issuance of N 5,000 note by the Central Bank of Nigeria (CBN).
Its President Dr. Wole Adetimehin in a statement signed by the head, Corporate Affairs, Joseph Obah, said the move was unpopular and unthinkable.
Adetimehin was of the view that the N 5,000 note would send a wrong signal that all was not well with the nation’s Economy, adding that it would amount to aiding inflation in a nation whose citizens are groaning under the burden of an inflationary trend calculated in geometrical proportions over the years.
He wondered why the CBN would conceive such idea at a time it should be pre-occupied with measures aimed at actualizing its canvassed cash-less policy. "CBN’S cash-less policy is well conceived and commendable but it is now being contradicted by the proposed issuance of the N 5,000 note," he said.
The public outcry against the move by the nation’s apex bank to churn out N 5,000 currency denomination has continued to make the news, with most critics calling on the Federal Government to apply the reins and forestall what would amount to a pitfall in the nation’s monetary policy. If public opinion is anything to go by, the move should be thwarted and the CBN made to a rest its plans.
Car Insurance Fraud Drops 16% says reports reveals Research published by Experian has revealed that attempts to commit insurance fraud reduced by 16 per cent between April and June 2012.

Research from Experian has found that 10 out of every 10,000 applications for insurance policies were fraudulent during the period between April and June 2012, compared to 12 out of 10,000 for the same period last year. 86per cent of the attempted fraud was reported as having been committed by first-party fraudsters using their own identity and providing incorrect information about their circumstances.
The report revealed that it is not only insurance that has benefitted from a reduction in attempted fraud. The financial services market as a whole has seen a three per cent decline year-on-year. The areas that have seen the most improvement though are motor finance and insurance providers.
This could be encouraging news for drivers trying to seek out cheap car insurance
. If fraud levels continue to drop insurance providers could start to re-coup some of the costs paid out on fraudulent claims which could have a positive effect on premiums. Andrew Goulborn, Commercial Director for car insurance
comparison site, commented: "This is certainly encouraging news for the insurance industry, but whether or not it will have a positive impact on the UK’s honest motorists remains to be seen as it is very early days. The Association of British Insurers estimates that undetected insurance fraud claims total £2.1 billion a year, which costs individual policyholders an average of around £50 a year on their premiums. This is certainly good news but, as ever, we would recommend that drivers compare car insurance using sites like to shop around for the best deal available to suit their individual circumstances."Source World Insurnce news

Fola Daniel, Commissioner for Insurance, Nigeria and Mrs. Nyamikeh Kyiamah, Commissioner for Insurance, Ghana signing the MoU.

Tuesday, 28 August 2012

L-R;The Immediate Past Chairman Of Nigerian Insurers Association (NIA), Olusola O. Ladipo-Ajayi and Incoming Chairman, NIA, Remi Olowude, during the 41st Annual General Meeting and handing over to the new Chairman, in Lagos.

L-R; The Immediate Past Chairman Of Nigerian Insurers Association (NIA), Olusola O. Ladipo-Ajayi, Chairman, NIA, Remi Olowude, Principal Counsel, Funmi Adeyemi and co, Prof. Moses O. Adeyemi and Director General/CE, NIA, Olorundare Thomas, during the 41st Annual General Meeting and handing over to the new Chairman, in Lagos.

R-L; Chairman, NIA, Remi Olowude, The Immediate Past Chairman Of Nigerian Insurers Association (NIA), Olusola O. Ladipo-Ajayi, Managing Director, Prime Insurance Company Limited, Gambia, Dawda Sarge and Vice Chairman NIA Godwin U.S. Wiggle, during the 41st Annual General Meeting and handing over to the new Chairman, in Lagos.

L-R;The Immediate Past Chairman Of Nigerian Insurers Association (NIA), Olusola Ladipo-Ajayi and Incoming Chairman, NIA, Remi Olowude, during the 41st Annual General Meeting and handing over to the new Chairman, in Lagos.





CIIN DG, Adegboyega Adepegba

About 60 staff employed by insurers yearly, says CIIN DG


Chuks Udo Okonta

Average of 60 people are employed by insurance companies yearly, Director General, Chartered Insurance Institute of Nigeria (CIIN) Mr Adegboyega Adepegba, has said.
He told Inspen that the industry has not been able to balance the rate at which people leave with that of intake.
He said: "We want to match the number of those coming in two times over and above the number of people going out. But we have not been able to achieve that. There is a danger if we have for example 30 people retiring every year and we cannot find 40 and 50 people replacing them by way of qualification.
"When we did the last count, we discovered that we only have an average of 60 people joining the profession every year. We do not have the statistics of those leaving the industry, but we know that people are leaving due to age and some other reasons. Though there are improvements in the number of people coming in, we are working seriously to get more people into the profession through the National Youth Service Corps (NYSC), visit to tertiary institutions, catch them young programme, our operation 5000 graduate scheme and others.
He said unless urgent measures are taking the industry may be heading for extinction as 60 per cent of its workforce is said to be near retirement age. He said the industry’s operation is threatened by human capacity gap, adding that most of the industry’s workforce is almost 60 years of age.
He noted that to revise the trend operators must begin to recruit young and intelligent personnel.
"The statistics available to us show that in few years from now, the industry work-force will consist of people that are 60 years and above age bracket, and this is not good for the industry. If about 60 per cent of the industry’s workforce will be aging – going towards 60 years, therefore, there is a dare need to inject new people into the industry. I think every body has agreed on this. By the time we achieve all these, the issue of succession planning and running of the companies would be made easier," he said.
He said the institute is reaching out to youths through their schools and encouraging them to take professional insurance examinations to beef up the human capacity depth.
Investigations show that Capital Express Assurance Limited in 2009 had 135 staff and in 2010 137 an indication that only two people were employed. Crystalife 123 in 2010 and 128 in 2011, (5). Niger Insurance Plc, 400 in 2010 and 401 in 2011 (1) and Standard Alliance Plc 187 in 2009 and 191 in 2010 (4).

Saturday, 25 August 2012

President, Lagos Area Committee of the Nigerian Council of Registered Insurance Brokers (NCRIB) Tunde Oguntade

‘About 90 per cent motorists have fake insurance documents’

‘About 90 per cent motorists have fake insurance documents’
Insurance operators over the years are considered to be under performing in spite the enormous untapped opportunities available to them. The President, Lagos Area Committee of the Nigerian Council of Registered Insurance Brokers (NCRIB) Mr Tunde Oguntade, in this interview with CHUKS UDO OKONTA, says what the operators are doing to reverse the trend and boost their operations.
How has the insurance industry fared so far?
The industry has fared tremendously this year. Given the financial statements of some of the operators, it has been very wonderful, the claims experience has been high, that notwithstanding, it has also reflected in the gross premium income collected by most underwriters. Awareness is on the increase, the NCRIB and Nigerian Insurers Association (NIA) have been on the forefront and National Insurance Commission (NAICOM) is also augmenting through its media campaigns on Market Development and Restructuring Initiative (MDRI) all over the country. By and large, we want to see improvement in the new year, given the income and awareness that have been created across the land.
Are operators meeting their projections?
Given the state of the economy, I would say yes. The operators have done very well for the economy have been slow as greater part of this year was given to electioneering campaigns and the economic moved slowly. The operators have really tried, for elections years are indeed generally slow.
Have operators start reaping the benefits from MDRI? 
Retail wise no. This is because the level of patronage has been micro so far. The economy really determines what happens when it come to insurance penetration. But next year, as brokers particularly at the NCRIB Lagos Area, we are looking at talking to Chairmen of Local Government Areas, in the area of compulsory insurance, this is public liabilities for public buildings, fire insurance for tenanted buildings and the likes, and we hope that with that, we would enhance patronage. Ideally, when the purse is lean people should take insurance as an avenue to mitigate possible losses. But you found out that people do not take advantage of insurance. They have losses and they get poorer, because they did not take steps to mitigate such losses. We would continue to go to public places and create awareness. We are sure that next year, not matter how bad it is, we shall have benefits of awareness in terms of insurance patronage. We hope to talk to treasurers at the Local Governments to see insurance policy procurement as one of the requirements for obtaining tenement rates and the likes. We are going to talk with the fire brigade too.

What are the likely variables that will drive the industry next year?
The first thing is awareness campaign. And another thing is if we have a budget that provides or alleviates people poverty. There is so much poverty in the land we wait to see the implementation of the budget. That would help us analyse the position of insurance. But as it is, we are only waiting and watching.
Would the industry achieve its N1trillion premium target by this year?
The industry as a group may be able to hit the mark given the fact that they are now benefiting from insurance of oil and gas, aviation and the likes. Now, the local content allows much money to flow into the industry locally instead of the capital flight experience we used to have. With the inflow of forex and new accounts in oil and gas as a result of the Cabotage Act, we might meet the target. Also because of the MDRI, we might be able to have much more money flowing into our purses, especially now that micro insurance is developing and a lot of people are beginning to appreciate insurance, even though very slow, we should be able to meet the target. Even if we meet the target, we would still be less than seven per cent of the expected penetration.
Would the electronic vehicle licence really curb the menace of quacks?
The electronic licence is truly a wonderful development. This is because with it you would not longer get a fake certificate. The device would help to develop the volume of patronage, ensure that people get valid insurance cover and when people get valid insurance cover and claims arises and they get prompt settlement it would encourage them to look at other areas outside the statutory requirement. If people get settlement in third party, it would encourage them to look at luxury covers such as life, assets protection, fire and burglaries and the likes. It goes beyond the ordinary statutory cover – third party.  
What are brokers doing to boost capacity to meet requirement in oil and gas businesses?
Brokers have been attending trainings. A number of brokers were in Dubai in last month for oil and gas seminar. This year within Nigeria we had about four local training and seminars and individuals have been partnering with foreign firms to learn and facilitate their knowledge of the oil and gas industry. People are taking personal development drives and they are also using the industrial opportunities like seminars organised by NAICOM, NCRIB, HSBC and other avenues. Brokers are learning the roles and I am sure that in the next one or two years, we are going to have quite a number of brokers in that business.
How positioned are underwriters and brokers for emerging markets?  
The basic problem operators have in Nigeria is lack of data and information. When you talk of climatic changes, metrological services department is there to give information. The last time we had avian flu issues, the metrological services department provided information in good time that resulted in very low losses of poultry lives. I want to say that if the operators take advantage of all the information that are available to them, they would be in position to project and prepare for emerging risks. Agric insurance should be seen as emerging market in Africa. Basically, in Africa, we are farmers before all these inventions and the rest. Vet medicine has improved so much that livestocks do not die easily like it used to be. There are improvement in the area of livestock and the likes. The fear of catastrophe in livestock has reduced and I think operators should position themselves and take advantage of agric insurance and move on to the next level. This is because truly there is enormous income to be obtained from that area.
How is your partnership with security agencies on deepening awareness?
In our last annual general meeting we had discuss, with the Assistant Corps Marshal of the Federal Road Safety Commission (FRSC) who sent a representative. It was our initiative to create rapour with the agency. We wanted to know the position of brokers and underwriters in the new licensing scheme and the benefits. We started on a good note; we have seen that insurers are now properly placed in the licensing scheme. Now, you cannot have your vehicle licence renewed without a valid insurance cover. It is a good step in the right direction. Now that they have brought in the underwriters, the issue of agency would also be sorted out. It is a good step as it would lead to almost 80 per cent motorists buying insurance, even if it is just a third party. We welcome it and would collaborate with them and the same time, we are looking at a way of ensuring that brokers are properly located in the scheme of thing.
What is the per cent of fake vehicle certificates?
About 90 per cent of third party covers carried by motorists are fakes, so you can imagine the figure. Let us assume that we have 2 million motorists in Lagos and you have only 200,000 that have valid insurance cover. That is how bad it is, but it is not going to be like that any more.  Obviously, you can not drive your vehicle without a vehicle licence or less you want to drive at night, and when you do, there would be police out there for you. With the new system that FRSC is bringing, they do not need to stop you before they know that you have valid cover or not. So the initiative will bring lot of gains for the industry in the next year.
Are underwriters living up to their responsibilities on prompt claims settlements?
At this point, let me give kudos to the Commissioner for Insurance Mr Fola Daniel. I think in the last four years, the area of claims settlements has greatly improved. We do not longer have people dodging claims as they used to do. Now people are aware that once you give a discharged voucher, within thirty days maximum, you must release the claims cheque. Also I must tell you that the excuse for liquidating liability is getting few by the day. I think claims settlement is on the top priority of very serious underwriter, for that is the real test for efficiency of a valid cover. I think claims settlement has improved over the last four years.
How can the operators really raise the confidence of the insuring public?
I think the first thing is engaging on corporate social responsibilities. The operators should be seen and heard through such scheme. They should be involved in the lives of the ordinary people on the streets. Just as the banks go to the market places giving gifts to woo customers, we should also go round. We should also give scholarships to let people know that insurers have come to town. A side that claims should be settled promptly and there should be better cohesion and collaboration among the operators. We should give a better face to insurance practice.

From Left: Company's STI Plc Olumide Adeyinka-Fusika; Chairman Ephraim Faloughi and Managing Director Wale Onaolapo at the company’s AGM in Lagos.

‘Why unethical practices prevail in insurance’

The large number of insurance operators is responsible for the prevalence of unethical practices in the industry, Managing Director of Royal Exchange General Insurance Company, Olutayo Borokini, has said.

Borokini, told Inspen that the large number of operators aids unhealthy competition which forces down the rate of insurance products. He noted that since there are no new businesses, operators’ scrabbles for the few available ones which often make some underwriters to pervert the industry’s rules.
He stated that South Africa with higher insurance penetration compared to Nigeria has fewer underwriters.
He said: “There are supposed to be industry standard, but they are not been followed. Competition has forced down. For now we have too many players for the businesses that are available. Take for an example South Africa, as big as the country is in terms of insurance penetration which is about five per cent, they have about 15 insurance companies.
“In Nigeria we have 59 firms. How do you control such great number of players, because if there are about five underwriters on a particular business, and the five reject the risk, the broker still has an opportunity to take other five in the market and can continue until he exhaust the whole. Mind you the companies have been capitalized up to N3billion.”
He called for collaboration among the operators, adding that the level of unethical practices is inimical to the industry’s growth.
 Commissioner for Insurance Fola Daniel, said the National Insurance Commission (NAICOM) is committed to developing the industry to have few strong and viable firms. He said the commission is not interested in too many firms, but firms that are big, strong and comparable with other firms abroad. He noted that the commission would be comfortable with just 10 viable underwriting firms which can compete globally.
 “As a regulator, I am not interested in multitude. I do not want 200 insurance companies. If there would be 200 companies, the companies must be big, strong and comparable with what we have in other environment where insurance culture is deed. But if they are only 10 that are strong and they can respond to claims payment promptly, come out with new products that will change the environment, come out with policies that will be environmental friendly and speak to the needs of the people, that is the kind of insurance industry we are looking at. So, whether they are many or not, I think the primary concern should be are they able to meet obligations as at when due,” he said.
Daniel, said most companies have began to appreciate the need to be bigger and stronger, adding that about five companies is presently in merger talks and that NAICOM has introduced measure to ensure that stronger companies remain operational.
Former Chairman Nigerian Insurers Association (NIA) Chairman Olusola Ladipo-Ajayi, said non compliance by operators has made the market agreement reached by the operators to protect premium rate failed.
He noted that most operators have decided to join the bandwagon of faulting the rule rather than supporting the association’s rule. He said the agreement has become a problem instead of a panacea.
 “The market has become a problem and I have explained the frustration of the association. The most difficult thing is that everybody complains but nobody is reporting defaulters to the association.
“We are not policemen in NIA secretariat. If our members report, it will be easier for us but rather everybody goes back to join the bandwagon and the truth of it is that the market agreement is being observes in the breach of it. But at NIA, we have resolves that we take an official position of NIA on every matter. So whoever decides to go against it is not going in accordance to NIA rules and everybody knows the NIA position,” he said
He said the association will not relent in its efforts to sanitise the industry, adding that the customer complaint bureau was set up to also make operators abide by the rule of a unified premium rate.

Insurers target high premium from vehicle licence

The partnership between insurers and the Federal Road Safety Commission (FRSC) on the new vehicle licence will yield higher premium to insurers the Managing Director, Sovereign Trust Insurance Plc, Wale Onaolapo, has said.
 Onaolapo told Inspen that insurers’ data have been built into the new vehicle licence issued by the FRSC. He noted that the measure will boost insurance premium which before now are lost to counterfeiters.
He said the data development of the industry remains one of the best things to have happened in the industry as it would help the sector in many areas especially planning for the future.
The President, Lagos Area Committee of the Nigerian Council of Registered Insurance Brokers (NCRIB) Tunde Oguntade, said insurance have been properly built into the new licence scheme, adding that the effort would curb fake document as it cannot be counterfeited. 
He said: “In our last annual general meeting we had discuss, with the Assistant Corps Marshal of the Federal Road Safety Commission (FRSC) who sent a representative. It was our initiative to create rapour with the agency.
“We wanted to know the position of brokers and underwriters in the new licensing scheme and the benefits. We started on a good note; we have seen that insurers are now properly placed in the licensing scheme. Now, you cannot have your vehicle licence renewed without a valid insurance cover. It is a good step in the right direction.
“Now that they have brought in the underwriters, the issue of agency would also be sorted out. It is a good step as it would lead to almost 80 per cent motorists buying insurance, even if it is just a third party.
“We welcome it and would collaborate with them and the same time, we are looking at a way of ensuring that brokers are properly located in the scheme of thing.”
He said the proposed electronic licence is truly a wonderful development, adding that this is because with it the issue of fake certificate would be curbed.
“The device would help to develop the volume of patronage, ensure that people get valid insurance cover and when people get valid insurance cover and claims arises and they get prompt settlement it would encourage them to look at other areas outside the statutory requirement.
“If people get settlement in third party, it would encourage them to look at luxury covers such as life, assets protection, fire and burglaries and the likes. It goes beyond the ordinary statutory cover – third party,” he added.

Insurers seek ways to enhance performance

Chuks Udo Okonta

How to enhance insurance operators performance would top the agenda in the
Chartered Insurance Institute of Nigeria (CIIN) 2012 Insurance Professionals’ Forum scheduled for September 12 to 15 in the Oyo State capital, Ibadan.
A statement by its Director of Corporate Communications Joseph Obah, said the event with the theme “Beyond Professionalism: Making a Difference”, would provide an opportunity for operators to rub minds on the issues affecting their practice and business.
Its President  Dr Wole Adetimehin, said the theme is a clarion call on professionals in insurance and the larger financial services sector, requiring them to brace up for emerging challenges facing the global economy. Adetimehin said that professionals should be better equipped to exhibit competences which are over and above mere professional qualifications.
He said: “The need has arisen for professionals to be further equipped both as risk managers and change agents through effective control of their business and positive transformation of the organizations under their trust.”

Director General of CIIN, Adegboyega Adepegba said it has become necessary for all insurance professionals to attend the Forum, stating that it is the only way they can key into the Institute’s Professional development agenda.
He regretted that attendance at the annual fora has been below expectation, especially in an era when other professions are maximizing such opportunities without compulsion. “I make bold to say that apathy to professional education cannot correct the palpable skills imbalance in an industry that is in dire need of greater expertise in the effective underwriting of many special risks including the emerging risks occasioned by security threats across the nation,” he said. The DG further decried the segmentation of the profession by some practitioners for selfish interests, stating that all must first see themselves as insurance professionals before classifying themselves as underwriters, reinsurers, brokers and loss adjusters.
He noted that it would be a new beginning for the Institute if all insurance professionals in mainstream insurance practice and those engaged as risk managers in government parastatals such as NNPC, NLNG as well as oil companies, manufacturing companies and banks, attends the forum at the Premier Hotel, Ibadan from 12th September. “We want to see a new beginning for us if all the professionals are able to storm the forum,” he said 
Observers believe that the insurance professionals in Nigeria could do better in terms of attendance at their annual professionals’ forum, considering the fact that the gathering engenders immense benefits in their continuous professional development.
Available data show that there are over 3,000 registered Fellows and Associates who comprise the core professionals and technocrats driving insurance business in Nigeria. Of these, only an average of 400 had attended the professionals’ forum since its commencement in 1991.

Wednesday, 22 August 2012

Court discharges interim order on suspension of Alliance & General Insurance

Court discharges interim order on suspension of Alliance & General Insurance
Chuks Udo Okonta
The Interim Order of injunction made in favour of Alliance & General Insurance (A&G) Plc, A&G Life and Fidelity Bond was today discharged on the strength of an oral application made by the National Insurance Commission (NAICOM) counsel, Prof. Taiwo Osipitan, SAN.
In discharging the interim order, Justice Patricia Ajoku of the Federal High Court, Lagos, held that the interim injunction granted in favour of the companies on August 14, 2012 was without jurisdiction.   Consequently, the interim order of injunction was discharged by the Court.
The court had last week, among others, granted an interim order restraining the Finance Minister, Dr. Ngozi Okonjo-Iweala and her ministry from either approving the removal of directors and management of Alliance & General Insurance or ratifying the appointment of new directors and management to assume control over the company.
The court also restrained the National Insurance Commission (NAICOM) from proceeding with planned sack of the current management of the insurance company. It went beyond that to also restrained NAICOM from implementing a directive suspending the insurance company from transacting new businesses in Nigeria for the next six months with effect from August 6, 2012.
Justice Ajoku went further to order NAICOM to remove forthwith from its website, information regarding the suspension of the companies from transacting insurance business in Nigeria for the next six months, as well as further publishing same in the national newspapers.
The orders were to remain in force pending the determination of a motion on notice filed by the companies against the NAICOM, including Ministry of Finance, Minister of Finance and the Attorney General of the Federation, Bello Adoke (SAN).
However, in the course of proceedings today, counsel to the Commission, Prof. Osipitan, called the court’s attention to the facts that the motion ex-parte filed by the companies which resulted in the interim injunction was not accompanied by a written address as required by Order 26 Rule 3 of the Federal High Court (Civil Procedure) Rules 2009.
Furthermore, the summon ex-parte filed by the companies in support of the application for leave to be heard during vacation, was also not signed. The written address in support of the said summons was also not signed.
The companies had gone to court following the six months suspension slammed on them by NAICOM for various infractions ranging from non-rendition of accounts; misrepresentation and non-disclosure of liabilities; non-remittance of premiums and commissions, and corporate governance abuses.
The suspension is to remain in force until such a period when the Commission is satisfied that: The violation of the provisions of the National Insurance Commission Act 1997 and the Insurance Act 2003 has been addressed, and the method of transacting business is no longer hazardous to the policyholders and potential clients.
No date has been fixed for the motion for interlocutory injunction in view of the on-going court vacation in the Federal High Court.


Niger set to curb claims delay

Niger set to curb claims delay
Chuks Udo Okonta
Niger Insurance Plc has dedicated a special account to curb delays on claims administration and settlement its Managing Director Mr Justus Uranta has said.
He said this at the company’s 2012 annual management conference in Lagos, adding that delay in claims management has been a great concern to the company. He said a dedicated account sorely for claims and commission payment has been adopted as a permanent solution to the challenge.
He said settlement of claims and commission remain the best marketing strategy for business generation. He noted that the company hopes to underwriter N20billion premium this year.
He noted that 10 years ago the company tapped into the market potentials facilitated by the country’s huge population by introducing the agency and life department division which has helped transformed it operations.
He said the company’s retail business has not been that successful, adding that efforts have been made to revitalise that aspect of business as a new incentive model has been put in place to drive the retail business. He said regional and branch managers would now be appraised on their ability to meet the company’s expectations on retail agency business.
Uranta said the company will do all things possible to abide by regulatory rules, adding that any officer who incurs penalties for the company will be held personally liable to face disciplinary actions.
He said: “Corporate governance has become a global issue because of its effect on operations of firms. It focuses on the adherence to acceptable ethical standards and best practices for the benefit of all stakeholders. To this end, the legal environment of our business is fast changing with several regulations coming into force from the financial sector regulatory bodies. Which all companies are expected to comply with fully and timely. It would be very unfortunate if Niger Insurance is listed among those companies facing penalties for infractions. Consequently, officers whose act of omission and commission incurs penalties for the company would be held personal liable and made to face disciplinary actions as a result.”
He noted that as part of the company’s on-going re-engineering, it has acquired a new software programme called turnquest to boost service delivery.
“In order for us to effectively benefit from this investment, extra funds have been approved which would among other things enable the software’s connection to regional and branch offices thereby effectively linking their operations with the head office,” he added.
He said the software would afford real-time responses to request from or to the head office and greatly improve on the quality of the company’s customer service.

Anxiety as brokers embark on reform

Anxiety as brokers embark on reform
Chuks Udo Okonta

This may not be best of time for brokers operating without statutory requirements as the Nigerian Council of Registered Insurance brokers (NCRIB) have embarked on reforms to sanitise the sector.
Some of the brokers have over the years operated with adhering to the provisions of the law, this the NCRIB said it will no long tolerate as it is poised to weed out charlatans who portray the sector in bad light.
President NCRIB Mrs Laide Osijo, Inspen that the council has adopted some measures to ensure that only competent professionals operate in the brokerage sector. She noted that the council is collaborating with the National Insurance Commission to ensure that brokers operate within the provisions of the law.
She said: “In view of the need to affirm the provisions of the NCRIB Act on registration of insurance brokers and eliminate the existence of charlatans from the insurance broking profession, NAICOM has continued to play complementary roles to the NCRIB in this area. The commission has formally forward a circular to all brokers operating with NAICOM licence but without NCRIB registration certificates to normalise their records with the council, immediately. Further to this, the council has also forward written circulars to all those affected to comply with the directive to avoid embarrassment as the council would soon publish the names of all its members in some national dailies, in adherence to the law.  The position of the law is that enlistment of an insurance broker with the NCRIB is a condition precedent to licensing by NAICOM, but regretfully some companies have brazenly flouted this provision for quite sometime.”
Osijo noted that in consonance with the need to affirm and take advantage of section 5 and 6 of the NCRIB Act, the council will be embarking on re-certification of its associate members, adding that the council is also considering the creation of a window of opportunities for members to raise their status.
She said the council has also intensified efforts to resolve the row between brokers and underwriters generated by commission on group life. She noted that the leadership of both bodies are presently discussing with a view to arriving at a point of consensus for the benefit of the industry. She said the industry’s regulator is also playing active role towards the resolution of the issue.
 “The issue of reduction of commission accruing to brokers on group life policies has for sometimes generated some unease between the underwriters and brokers. I delighted to note that the leadership of the NIA and NCRIB are discussing the issue, with a view to arriving at a point of consensus, for the benefit of the entire industry,” she said.

‘Why PenCom could not curb corruption in pension departments’

‘Why PenCom could not curb corruption in pension departments’
Chuks Udo Okonta

Pension funds are released to the pension departments for payments of pension benefits by the government without recourse to the National Pension Commission (PenCom) its Director General Mohammad Ahmad, has said.  
In a statement Ahmad said this has resulted in the lack of external independent review that could serve to authenticate the accuracy of pensioners’ entitlements determined by such budgetary estimates, thus ensuring that pensioners are not underpaid or on the other hand, that government liability is not overstated.
He noted that the commission has inadequate supervisory control over pension department, adding that pension departments had operated within their parent Ministry, Department and Agencies (MDAs), with same administrative/operational structure.  This arrangement he said weakened the regulatory and supervisory oversight of the commission over the pension departments due to lack of centralization of the oversight functions.  He noted that this has resulted in a situation where the commission is unable to exert supervisory control over the pension departments as they do not regard the commission’s supervisory role over them, a clear violation of Sections 30 to 38 of the Pension Reform Act (PRA) 2004.
He noted that in accordance with the provisions of Section 30(3) of the PRA 2004, the pension departments are required to render returns to the PenCom on monthly pension payments, deceased pensioners and other activities such as verification exercises carried out, etc.  He said several efforts, such as reminder letters, telephone calls and follow-up visits have been made by the commission to the pension departments with a view to ensuring their compliance with these statutory provisions, adding that pension departments hardly render these statutory returns to the Commission. 
He said the military pension board which hitherto rendered returns consistently stopped it since June 2011, stressing that these returns would have assisted the commission in carrying out its supervisory role over the pension departments effectively. 
He said: “Yearly pensioner verification exercises have been institutionalised by the continuous budgetary allocations to the various Pension Departments towards such exercises.  This appeared to have provided an incentive for each of the pension offices to carry out verification exercises yearly. In addition, the exercises were centralized in state capitals or few chosen locations, which made it difficult for the aged pensioners to travel long distances to be verified. Indeed, some aged pensioners have lost their lives in attempts to be verified or risked losing their pensions.
“Inadequate logistics support has been one of the challenges that have rendered pensioners’ verification exercises cumbersome resulting in a good number of the pensioners being reluctant to turn up for the exercises at scheduled dates. Furthermore, the preliminary assessment of the Pension Departments carried out by the Commission revealed that some of the Pension Departments failed to update their databases with the outcome of such exercises. 
“Although verification exercises are carried out annually by most Pension Departments, the incessant complaints of non-payment, short-payment and non-harmonization of pension benefits had continued to inundate the Commission, which is indicative of the ineffectiveness of these exercises.
“Preliminary assessment of the Pension Departments carried out by the Commission in 2010 showed that some Departments had no proper archiving system in place, especially the Civil Service and Police Pension Departments.  Retrieval of pensioners’ files when needed was an arduous task.  Most of the Pension Departments do not have biometric database of their pensioners.
“The pension payment arrangement for Parastatals pensioners involved payments from the Budget Office (BOF) to insurance firms, which in turn released such funds to the Board of Trustees (BOTs) of the Parastatals for onward payment to the pensioners.  The Scheme has so far faced serious implementation challenges, including insufficient funding, diversion of pension funds by the insurance companies, inadequate documentation maintained by the BOTs and consequently, lack of accountability.” 
Ahmad said Pension Desk Officers (PDOs) of the MDAs are incessantly changed at will by institutions, which made it difficult to keep track of records. He noted that this situation was further compounded by the absence of proper handing-over leading to truncation and lack of institutional memory, adding that the situation was even made grave by the lack of basic skills required to effectively man the desks as there was an observed dearth of requisite knowledge leading to improper appreciation as well as application of basic skills for the computation of pensioners’ benefits. 
He said in a bid to address the above challenge, PenCom has commenced regular training and capacity building for the desk officers across the nation with a view to upgrading their skills in the emerging scenarios.
He said inadequate Information Communication Technology (ICT) infrastructure remains of the problems of the pension departments, adding that most pension offices are not adequately automated.  He said they do not have sufficient personal computers with adequate hardware and network configurations and that they do not also have the capability to capture and maintain a robust pensioner database with biometrics (i.e. photos and fingerprints) or detect multiple/duplicate pensioners’ records and generate reports analyzing the database.
He noted that except for the military pension board, none of the pension offices had a reliable off-site back up arrangement and disaster recovery plan, stressing that it is pertinent to emphasise that effective pension administration is driven by efficient data management, which can only be achieved through automation. 

Ahmad noted that to curb the rot in the pension departments Pension Transitional Arrangement Department (PTAD) that would co-ordinate the activities of the existing pension departments should be established in accordance with Section 30(1) of the PRA 2004 and in addition, the PTAD would be regulated and supervised by PenCom and would be required to operate under the rules, regulations and directives issued by the commission, from time to time, as provided in Section 30(2)(4) of the PRA 2004.

“In order to address the identified challenges in the operations of the Pension Departments, it is imperative to strengthen their administrative structures to enshrine transparency and accountability in their operations, institute efficient operational infrastructure such as ICT infrastructure within the Departments and provide an enabling environment for effective regulation and supervision of their activities.   

“Budgetary estimates prepared by Pension Departments should be reviewed by the Commission for accuracy and completeness. 

“There is need to determine, once and for all, the number of existing Federal Government pensioners, their entitlements and outstanding pensions and generate a robust database for these pensioners. As the number is not expected to increase, it will provide a platform for accurate estimation of the liabilities of the FGN pensioners and hence avoid the routine annual verification exercises. To avoid annual verification exercises, a robust system whereby pensioners can indicate that they are alive should be worked out and instituted,” he added. 

He said there is the need for an independent review of the outcome of the verification exercises to authenticate the accuracy of pensioners’ entitlements determined by such exercises, stressing that this would ensure that pensioners are not underpaid or on the other hand, that government liability is not overstated.

Reps to ensure proper insurance of government’s properties

Reps to ensure proper insurance of government’s properties
Chuks Udo Okonta
The House of Representatives would ensure that all Federal Government’s properties are properly insured to aimed insurance practice, its Chairman Committee on Finance Abdulmumin Jibrin, has said.
He disclosed this at a forum organised by the National Insurance Commission (NAICOM) for members of the House Committee on Finance in Karu Nasarawa State. He noted the members would also support the development of insurance through strengthening of its laws, adding that appropaite attention would be giving to the insurance bill whenever it is presented to the House.
He said the committee would support NAICOM in realising all its plans and will leave no stone unturned at ensuring that all Federal government assets are insured. He however regretted the inability of members to comment on the content of the draft bill saying "it is yet to be presented to the National Assembly officially. We will therefore wait until it is formally presented to us for deliberations and passage to law. The good thing is that we are now aware of it and have a background on which we could build on."
Commissioner for Insurance Fola Daniel said the various initiatives and reforms being embarked upon by NAICOM is constrained by poor legal framework, poor public perception of the insurance, and low awareness amongst the populace.
 “To address the constrain occasioned by poor legal framework, in March 2009, the Honourable Minister of State for Finance inaugurated a committee to review all laws and regulations relevant to insurance in Nigeria under the chairmanship of Professor Joe Irukwu. The Committee had since submitted its report and a new insurance draft bill is presently being reviewed by the Federal Ministry of Finance. The draft bill is expected to be passed to the Federal Executive Council soon for onward presentation to the National Assembly," he said.
 Daniel noted that the review of existing insurance laws in the country became imperative specifically by the need, amongst others, for a robust legal and regulatory framework that will ensure that the Insurance sector contributes positively to the principal objective of the Financial System Strategy 2020 (FSS 2020) to make Nigeria Africa’s financial hub and one of the twenty (20) largest economies in the world by the year 2020, to evolve effective risk based supervision, in the regulatory system as the existing rule based supervision, enabled by the current laws has become obsolete and therefore cannot drive the envisioned development of the sector. Others are the need to ensure ethical practice and international best practices as required by the International Association of Insurance Supervisors (IAIS), and the need for a legal and regulatory framework that allows the supervisory authority to deal promptly with issues evolving from the dynamism of the insurance business.

Monday, 20 August 2012

Insurers deploy over N600b for business

Insurers deploy over N600b for business
Chuks Udo Okonta
Insurers deploy over N600billion in pursuit of business the Commissioner for Insurance Fola Daniel, has said.
He told Inspen that with the enormous opportunities in the economy, the industry has the potential to achieve N2trillion income. He said the operators are under trading with the cash at their deposer stressing that the industry after five years of recapitalisation ought to have been a model to insurers across African and other part of the globe.
He said: “The issue of how close or far the industry is towards the achievement of the target would not have a straight answer. I think what we need to do is really to go back to the fundamental of the figures behind that target we gave ourselves. On the basis of what we have in the nation, should we really be talking of N1trillion income? Five years after recapitalisation, should we not be talking on something more than N1 trillion? If we deploy N500billion to N600billion to do business, should not be looking at doubling that amount of money? Or even making it triple? I think we have the wherewithal to generate income in excess of N1trillion.
“How much of it we have gotten, I cannot say, because the 2011 account has just reached the commission, I do believe that by the time we get most of the accounts, we would be able to say; yes this is where we are exactly. I think the underlining thing should be, do insurers have the capacity? Do we have a business environment that can support the premium income of N1 trillion or even N2 trillion? And the answer is yes.”
He noted that the Insurance industry is assiduously working to net over N100billion from motor insurance, adding that going by the statistics provided by the Federal Road Safety Commission (FRSC) which put vehicles in the country at over 10 million, the industry through its initiatives will net over N100billion from that class of insurance.
Daniel said the industry also hope to achieve gross premium income of N1.10 trillion, create additional 250,000 new jobs, make substantial contribution into the Fire Service maintenance fund as provided in section 65(5) of the Insurance Act, attain3.0 per cent insurance contribution to the nation’s Gross Domestic Product (GDP) and attain premium per capita contribution of N7, 500 from N1, 200.
He said if available statistics are anything to go by; the MDRI’s target of N2.5 trillion gross industry premium incomes by the end of 2015 and N6 trillion by the end of 2021 is on course.
Daniel said in terms of average growth rate, the industry has recorded 36.0 per cent for 2007-2009 up from 11.67 per cent for 2004-2006, adding that although complete figures for last year are not yet available, there are strong indications from what is available that the industry will record significant increase.
“The insurance sector in Nigeria has just emerged from the dormant stage where despite a huge population advantage; it failed to achieve an appreciable growth in 35 years. Suffice to say however, that in 2008 the sector entered into its early growth years and has been making steady progress,” he said.
He said the National Insurance Commission (NAICOM) will continue to adopt developmental strategies to move the industry forward and that errant operators will be sanctioned to improve the industry’s image.

Operators decry poor insurance penetration

Operators decry poor insurance penetration

Chuks Udo Okonta
Chairman Nigerian Insurers Association (NIA) Remi Olowude, has described poor insurance penetration as a challenge to the industry’s growth.
Olowude who spoke in Lagos, said the poor level of insurance penetration has to be dealt with to make the industry thrive. He called on operators to up their games in ensuring that they maximise the enormous insurance potentials in the country.
He said: “All around us, we see challenges and opportunities that abound in our industry and the nation economy. These include restrictive laws on insurance practice, issue of multiple taxation, inefficient power sector and Nigeria Content Policy on oil and gas. Others are ensuring the workability of the market agreement, ensuring greater insurance awareness and penetration and migration to international financial reporting standard.”
He promised to improve the quality of insurance education and practice, build better platforms of communication between the association and member companies, work with his predecessors, improve relationship between the association and regulators, collaborate with other trade industry to deepen insurance penetration and promote ethical standard among members.
President/Chairman of Council Chartered Insurance Institute of Nigeria (CIIN) DR Wole Adetimehin, said the institute is partnering with teachers at secondary and tertiary institution to inculcate insurance education on students, promote insurance penetration.

Insurers target untapped annuity market

Insurers target untapped annuity market
Chuks Udo Okonta
The annuity market is yet to be tapped, and operators are making frantic efforts to penetrate into it the Managing Director CrystaLife Assurance Plc Mrs Oluseyi Ifaturoti, has said.
She told Inspen that operators have been looking for opportunities to meet with prospective clients in that area. She noted that annuity which provides succour for retirees has been a haven of opportunities since the emergence of the new pension scheme.
She noted that most operators have been building their capacity to enable them maximise the potentials in the market.
According to National Pension Commission (PenCom) which is regulator of annuity, the activities in the market picked have up, adding that it has received a total of 74 requests for annuity retirement plan and they were approved.
“It should be noted that the annuity market is relatively new in Nigeria as the regulation on annuities was finalized and released by PenCom in collaboration with the National Insurance Commission (NAICOM) in December, 2009, after the consolidation exercise in the insurance industry. This accounted for the late commencement of purchase of annuity by retirees as another method of collecting regular periodic payments of pensions,” PenCom said.
PenCom noted that in collaboration with National Insurance Commission (NAICOM) 26 Life Insurance Companies have been endorsed to carry out annuity business in Nigeria.

Transfer window: PFAs plan biometric data for contributors

Transfer window: PFAs plan biometric data for contributors
Chuks Udo Okonta
 Pension Fund Administrators (PFAs) are working ways to capture the biometric data of every body that have a pension account in Nigeria, Chairman Pension Operators Association of Nigeria (PENOP) Dave Uduanu, has said.
He told Inspen that pension operators together with National Pension Commission (PenCom) are working assiduously to ensure that the biometric of every individual that has Retirement Saving Account (RSA) is captured in the new data plan, adding that once the biometric enrolment is completed; the transfer window would be opened by PenCom.
He said: “We have commenced the initiative that would lead to the opening of the transfer window. Where we are now, is working out collaborative bases to capture the biometric data of every body that have a pension account in Nigeria.
“If ones biometric data is not captured, because it was done manually, we are going to do electronic capture of the biometric data. I expect that to commence as soon as possible and would be concluded very quickly. Once that biometric enrolment is complete, the transfer window would be opened by PenCom.”
He said the opening of the window would give contributors the option of changing their pension fund administrator, adding that the need for the window has become necessary as some RSA holders are complaining of their PFAs.
Director General National Pension Commission (PenCom) Mohammad Ahmad said the commission in a bid to provide RSA holders with choices of investment multiple fund structure would be introduced.
Ahmad said the framework to this effect is being worked out, adding that the move is part of the initiatives taken to reposition the industry.
“As we consolidate our achievements in the implementation of the pension reform in the coming year, a number of initiatives would be introduced. The Retirement Savings Account (RSA) transfer mechanism would be made operational as the framework is currently being reviewed by the industry. 
“To provide RSA holders with choices of investments, a Multiple Fund structure would be introduced subject to specific guidelines by the end of the second quarter of next year.  Additional disclosure requirements would be required of operators to promote further transparency and accountability in the industry. 
“The Risk Management and Analysis System which is the core supervisory application would be finalised and would greatly improve the efficiency and effectiveness of the commission,” he said.
He noted that in a bid to reform, operators should not lose sight of the fact that there may be challenges and attempts to undermine the system.  He added that it is therefore the duty of RSA holders and relevant stakeholders to ensure that the scheme is not only protected but also nurtured to sustainable and enduring system which would be proud to bequeath to next generations yet unborn.