Monday, 29 October 2012

CIIN berates operators on disunity

CIIN berates operators on disunity
Chuks Udo Okonta
The President Chartered Insurance Institute of Nigeria (CIIN) Dr Wole Adetimehin, has said the rift among insurance operators is inimical to the industry’s growth.
Adetimehin, who spoke in Ibadan, said the operators are loyal to the arms of the industry instead of working as professionals with a common stake.
 He called on the practitioners to have a change of attitude, adding that the industry can only grow when all stakeholders show commitment to their profession.
He said: “My observation is that we are loyal to arms of our industry instead of seeing ourselves as professionals with a common stake, i.e brokers are loyal to Nigerian Council of Registered Brokers (NCRIB), underwriting staff to Nigerian Insurers Association (NIA), adjusters to Institute of Loss Adjusters of Nigeria (ILAN).
“We must shed this coat and put up a united front as one profession. Self-development is advocated for the individual and companies should reward the staff adequately when they acquire higher qualifications.”
He noted that the need for change of attitude and total commitment to the profession can note be over emphasized, adding that integrity and transparency should at all times be the guide for operators.
“We must refrain from unethical conduct and any infractions should be reported to the institute for disciplinary action to deter others and improve our perception,” he said.

Friday, 26 October 2012

‘Insurers expend less than 1% on training’

‘Insurers expend less than 1% on training’

Chuks Udo Okonta

An analysis of the statement of accounts of many insurance companies reveals that less than one per cent of their expenses were made on staff training as international best practice which is about five per cent.
Inspen gathered that most companies have resolved to slash their budget on training to mimimise cost.     
A member of staff of a company who does not want to be named said the company has embargoed management and training expenses.
President Chartered Insurance Institute of Nigeria (CIIN) Dr Wole Adetimehin, said the poor investment in staff training may account for the poor quality of personnel in recent times.
He noted that some operators see training as a favour to their staff and worst still a favour to consulting firms.

He said the quality of any output is dependent on the input; therefore, operators need to develop their personnel.
He said: “Very few companies have well established training departments and even engage in overseas training of our staff. Few offices also have well equipped up to date libraries.
“When last did our members attend a technical programme to update our skills and knowledge? When specific seminars designed to address specific areas of our businesses are organised, we hardly find professionals in attendance. We need to have a change of heart in this regard.”
Director General CIIN Adegboyega  Adepegba, said insurance companies have continued to slash their budget on staff training in recent time, adding that the reduction in budget posed great challenge to the development of the industry which needs qualified personnel to thrive.

A&G Insurance pays over N1.2b claims to NCAT

A&G Insurance pays over N1.2b claims to NCAT
Chuks Udo Okonta

Alliance & General Insurance (A&G) Plc has paid over N1.2 billion claims to Nigeria College of Aviation Technology’s (NCAT) aircraft that crashed in 2010, its Chief Operating Officer (COO) Dotun Onipede, has said.
Recall on 23rd May, 2010 a plane belonging to NCAT crashed during the process of landing by a trainee pilot, however there was no causality, but the plane a model, TAMPICO TB9 plane was totally wrecked with many of its components totally bruised, including the propeller, the engine, the sliding gear, the fartewells, the wings and the plane curling.
Onipede said the firm spent over N250 million on one of the Aviation College's most prestigious aircraft, 5N-CAG that crash landed months ago to be ferried to Denmark for repairs.
He noted that the aircraft is ready, adding that the Nigeria Civil Aviation Authority (NCAA) has gone to inspect and will soon issue a ferry-permit to allow the aircraft to be returned to Nigeria.
He said the crash is indeed pathetic but "we should give glory to God that no life was lost in the process, adding that "Our company is ready to tackle this issue with high level of urgency required being the only training institute for pilot in Nigeria."
He said: "Our consistency in the payment of claims has strategically placed us as a well established and reputable insurance company with high level of integrity and whose word remains her bond.”
He reaffirmed the company's commitment to settle claims, adding that the aviation mishap that took place in NCAT, Zaria will be a thing of history as the company is on ground to fulfill all its commitment.
 "It is in our character to face challenges of this nature as it can be seen in our records in the insurance industry,” he said.
Onipede stressed that the firm is trying to restructure its business in line with the standards expected of them in the industry in accordance with regulatory provisions.

Wednesday, 24 October 2012

World Financial Group reviews new life insurance study

World Financial Group reviews new life insurance study

For many American workers, life insurance benefits are provided, or at least offered, by employers. Given the important role that life insurance plays in long-term financial planning, this might seem like a boon, but a new study suggests that American workers may not value their life insurance benefits as much as they should. The study, conducted by Guardian Life Insurance, reveals that while employees do tend to place some value on their life insurance benefits, "there is significant room for improvement."  The study has received notice by World Financial Group, Inc. (WFG), a financial services marketing company.
World Financial Group is a company that is passionate for providing a variety of financial services, including life insurance, through its associates. World Financial Group reviews various studies and statistics regarding life insurance, and seeks to share this knowledge with its independent associates so they, in turn, can educate and empower their clients. The company has responded to the new Guardian study with a press statement.
According to World Financial Group, appreciating the benefits of life insurance is directly tied to understanding what those benefits can do, and recognizing their potential for real-world value. The company notes that "comprehending how benefits affect you and your family is essential, and it is important to know what value they provide in a time of need."
In the Guardian survey, employees were asked to rank their assessment of life insurance benefits, on a scale of one to 10. The survey found the average score to be 6.8. Roughly half of all workers said that they were highly satisfied with their life insurance benefits from their employers. Meanwhile, 42 percent of employers responded by saying that they believed their employees to be highly satisfied with their life insurance benefits.
World Financial Group reviews studies like these and takes note of important trends. For this study, WFG draws special attention to one particular finding in the Guardian study. Workers and employers alike are found to agree that, generally speaking, life insurance benefits are not well understood.
Guardian also notes that age and gender can affect the extent to which an employee values life insurance benefits. Broadly speaking, older employees place a higher value on life insurance. Additionally, the study finds that, on average, women value life insurance more than their male counterparts.
World Financial Group, Inc. is a marketing company whose independent associates offer financial services to clients through its affiliated companies across the United States WFG is passionate about empowering clients by providing information regarding the benefits of the broad amount of products and services offered. World Financial Group believes clients can make the best decisions for themselves and for their families when they are fully and properly informed about all existing options.

Leadway Assurance rating drops to negative

Leadway Assurance rating drops to negative

A.M. Best Europe – Rating Services Limited world’s renowned rating agency has revised Leadway Assurance Company Limited outlook from stable to negative Inspen has learnt.
The agency revised the outlook from stable and affirmed the financial strength rating of B- (Fair) and issuer credit rating of “bb-”.
A.M. Best Europe said the negative outlook on Leadway’s ratings reflects the ongoing uncertainty associated with the performance of its aggressive investment asset allocation with large equity and unquoted securities holdings; hence, the subsequent impact on its risk-adjusted capitalisation.
It noted that the ratings also consider Leadway’s exposure to the high political, economic and financial system risks associated with its operation in Nigeria.
The agency said Leadway’s risk-adjusted capitalisation has weakened in 2011, due to the decline in equities revaluation reserves owing to substantial reductions in stock prices in the capital market, adding that going forward, it believes that Leadway’s risk-adjusted capital position is likely to remain under pressure due to the volatile domestic capital markets and the underwriter’s ambitious growth targets.
It said: “Leadway’s net income after taxes decreased by 25.6% to NGN 1 billion (USD 6.5 million) in 2011 due to a higher claims payout than the prior year, which was caused by large single losses. The life segment returned to profitability in 2011, posting a gain of NGN 147 million (USD 0.9 million). “However, the company’s non-technical account continues to be negatively impacted by allowances that are created for doubtful quoted and unquoted investments as well as write offs and provisions for bad and doubtful accounts. In 2011, the proportion of equities in the investment portfolio declined to 30 per cernt (2010: 39 per cent) and fixed-income holdings were actively increased to six per cent (2010: 0.1 per cent) of the total investment portfolio.
“While Leadway grows its annuity business it is thriving to back its life liabilities with government bonds. Despite the reduction of equities within Leadway’s portfolio, A.M. Best believes that investment performance is likely to remain subjected to significant volatility going forward, due to the company’s large equity holdings and approximately NGN 5.8 billion (USD 36.6 million) (2010: NGN 4.1 billion) of unquoted securities as at year-end 2011.”
The agency noted that Leadway benefits from a good business profile within local market as an established writer of non-life retail lines and larger commercial risks, adding that additionally, the company continues to grow its life insurance book.
It said in 2011, the company’s total gross premiums increased by 44 per cent to N24 billion ($ 151 million), mainly driven by one large contract within the oil and gas industry (NNPC Insurance account). It added that the life business grew by 75 per cent to NGN 4.5 billion (USD 28 million) driven by a significant increase in Leadway’s annuity business, which the company had started writing in 2010.
It noted that prospectively, Leadway is likely to experience good premium growth in 2012, especially in the life segment.
The agency said positive rating actions would occur if the firm strengthens its risk-adjusted capitalisation and continues to decrease its large equity holdings and investments in unquoted securities.
It noted that negative rating actions could occur if the company experiences further deterioration in its risk-adjusted capitalisation below a level considered supportive of the current ratings, adding that deterioration in operating performance also would be seen negatively.
A source in company told Inspen that the drop was due to economic challenges which affected the firms operations.

NAICOM, SEC to partner on supervision

NAICOM, SEC to partner on supervision
Chuks Udo Okonta
The National Insurance Commission (NAICOM) and the Securities and Exchange Commission (SEC) have agreed to collaborate on supervision and regulation of insurance companies quoted in the Nigerian Stock Exchange (NSE).
A statement by the Assistant Director, Corporate Affairs, NAICOM, Lucky Fiakpa, said the need to partner was reached when the Director General Securities and Exchange Commission, Ms Arunma Oteh, paid a courtesy visit to the headquarters of the NAICOM in Abuja yesterday.
The Commissioner for Insurance Fola Daniel, noted that some 10 years ago, the commission would have little or nothing to do with SEC because not more than three insurance companies where listed on the Nigerian Stock Exchange. But, today, well over 30 companies are listed on the Exchange.
He said: “Some of the companies we have primary responsibility to regulate also have one or two things to file or do with SEC by virtue of the fact that they are quoted on the Nigerian Stock Exchange. This therefore makes it imperative for the two regulators to collaborate to ensure effective supervision and regulation of the entities they have to deal with.”
 Oteh stressed the need for the two agencies to collaborate in joint inspection and supervision of insurance companies that are listed on the Exchange. She said such collaborative exercises should be done more frequently to ensure effective supervision of the companies.
She commended NAICOM’s transformation agenda which she said has led to massive awareness about the insurance sector. She particularly noted the awareness generated about the compulsory insurance products campaigns and said it was quite enlightening.
She also commended the commission’s efforts in trying to introduce micro-insurance in the country. She would want to see the insurance sector playing a key role in the economy.
“Financial inclusion is very important because all over the world, insurance assets are critical for economic development. What we see happening in pension assets should also happen in insurance assets,” she said.

Monday, 22 October 2012

Consolidated Hallmark pays over N600 m claims in Q3

Consolidated Hallmark pays over N600 m claims in Q3
Chuks Udo Okonta
Consolidated Hallmark Insurance plc (CHI) has paid claims worth over 600 million, as at the end of third quarter it Managing Director Eddie Efekoha, has said. 
He disclosed at the official presentation of Group Accident Insurance Cover to members of the National Association of Insurance Correspondence (NAICO) in Lagos, adding that the company is committed to meeting policyholders’ expectation.
Efekoha said the company takes payment of claims as priority because of how much it values its clients. He noted that the company will always ensure that it’s underwriting is healthy and professionally handled.
Besides, he believes that the business of insurance is driven by referrals and customers’ recommendation.
He said: “For us as a company, we recognise that we are in business to pay claims. Therefore, we must operate and ensure we do not fail. When we do that, satisfied clients will recommend themselves and other people to us. So it’s a business that is built on referrals such that existing clients will refer you when you have done well and we will continue to do that in the mist of changing environment.”
He noted that despite the harsh business environment and challenging regulatory regime, the company has continued to witness upward movement in growth fundamentals.
He said the company is happy with where it is, having achieved a very modest growth, stressing that the key driver of its business from the start is its people including the staff and the board.
Efekoha noted that part of the progress the company achieved include early hosting of its Annual General Meetings (AGM) having invested in faster technologies for improved processes.
“Each year we try to bring forward the time we hold the AGM. Since 2007 we held the AGM in August, then July and this year, we held it before the first half of the year and as we move on, we will continue to improve on the time of the AGM,” he said.
He noted that the weight of premium receivables in the industry has been a challenge to operators under a constantly changing regulatory regime.

Managing Director Consolidated Hallmark Insurance Plc, Eddie Efekoha

Insurers yet to get claims reports from flood victims

Insurers yet to get claims reports from flood victims
The flood disaster that ravaged many parts of the country has once again revealed the low level of insurance patronage in the country. The Managing Director Consolidated Hallmark Insurance Plc, Eddie Efekoha, in this interview with Chuks Udo Okonta, said insurers are yet to get claims reports from the flood victims. 
How has the insurance industry fared this year?
The year 2012 actually started with a lot of hope, as we all thought that the Federal Government transformation agenda which identified several economic reforms will spill over to insurance in terms of business generation. Government as a major spender could impact on our business if only they will execute the different projects and programmes, of course, the different sectors of the economy including insurance will benefit.
We had thought that things will go upwards, but, l still do not think that will happen given that we are already in October, the 10th month in the year. I do not think that has happened, but suffices to say that the industry has grown as we are still providing immediate service to the general economy as a stabilizer.
We have witnessed key events that have shaken the industry. The first is the Dana air crash; secondly, we are currently experiencing what would have been said will never happen in Nigeria, which is flooding.
We have not identified Nigeria as a natural disaster zone and most insurers look at flood as special risk, whereas this kind of flood is like one coming from a leaking overhead tank, affecting both the high and the low. Even President Goodluck Jonathan’s house in the village was not spared, which means it is not just my house or yours in the village or town that was flooded. This flood is no respecter of anything and the flood risk is the situation we face today, which means that the risk is with us and we must take all the measures to plan for it and to manage it effectively.

Has Consolidated Hallmark Insurance been able to achieve its projections for the year?

Fortunately, for our company, Consolidated Hallmark Insurance plc, l will say that we are happy with where we are, having achieved a very modest growth. The key driver of our business from the start is our people - the staff and the board. We have continued to improve on the hosting of our Annual General Meetings (AGM) by investing so much on the processes. Each year we try to bring forward the time we hold the AGM. Since 2007 we held the AGM in August then July and this year 2012 we before the first half of the year. As we move on, we will continue to improve on the time of the AGM.
The numbers have grown but not as we expected because we are still under the weight of our past in terms of receivables in the industry, which has not helped anybody under a constantly changing regulatory regime. As far as this is concerned you will recall that the consolidation was done on the bases of allowing companies up to N400 million receivables as part of their shareholders fund. That is in determining the N3 billion shareholders funds that is the new capital. Underwriters were allowed N400 million on receivables, meaning that effectively, what was on ground was N2.6 billion. By the time that was over we came up with a regime that allowed receivables up to one year being allowed in their accounts, then we moved on shortly after to have receivables classified into 90 days, 180 days, 270 days and 361 days and we are told that within180 days we may allow 10 to 15 per cent and thereafter, 90, 100 and 180. Before now, you were allowed something and now, we are at the threshold of saying you are not even allowed anything again.
So all of these have taken place within a span of five years. You will appreciate therefore what impact that has on the financial reporting of various companies.
All we have continued to do is to comply as we are in a regulated business. Fortunately, I do not think that we are in any serious breach of regulatory requirements in terms of returns.
We equally realised that this year like every other year, we have greater stake to our stakeholders particularly the policyholders.  Just recently, we were involved with Chevron fire. It might look small, but it’s something. We paid a claim of about N60 million to somebody just few months ago even though the major claim has not been concluded. And as we speak, we are about settling claim of about N180 million for a fire that happened in Kano.
For us as a company, we recognise that we are in business to pay claims; therefore, we must operate and ensure we do not fail. When we do that, satisfied clients will recommend themselves and other people to us. So it’s a business that is built on referrals such that existing clients will refer you when you have done this and we will continue to do that in the mist of changing environment.
Of course, you know we moved to our Head Office on Ikorodu Road this year from our Victoria Island Office which now serves as our branch office. In that branch we have our energy and Gas risk. Our movement here has helped us, and that is why at short notice we can still call others and we meet. At Victoria Island,  when we have occasion to hold this kind of meeting we find out that one or two persons will be missing. So, we enjoy being here. It has helped our productivity because man-hours that we used to spend on Lagos traffic, not to talk about the closure of 3rd Mainland Bridge have all reduced. Now some of us spend just 30 minutes to get to the office, which was formally taking an average of two to 2 ½ hours. But overall, I will say our numbers have made some movements upward.
As at September, which is the end of third quarter we exceeded what we paid in terms of claims in the whole of 2011. That means that by the time the year runs through we must have paid out quite huge. Last year, we paid N512 million, and this year we have paid about N615 million as at September already. I have said this in to buttress the fact that we value our customers.
We have undertaken a sort of strategy session, which we regard as learning the environment and we will continue to learn by getting people to talk to us at the board and management levels. In the last three years, the board has always held annual retreat where we have consultants talk to us and there is usually that regular interface between the board and the staff in terms of resolutions from both sides.
We also realised that the first in our priority is claims payment, but in doing that we ensure that underwriting must be very solid. All of these can only be achieved if you have the right people, so, we take clues from the UAC’s and Lever Brothers of this world. They have several chief executive officers so; our people are empowered to that level. We have three regions because we sub-divided the market into three.
Truly, insurance is very challenging particularly in the light of very strong regulatory demands, but we thank God we are coping.

What impact has the recent flood on insurance market?
There is no gainsaying the obvious that our market will be threatened by these events. We have had this flooding incident and no doubt some of them have been insured. However, it depends on how long the flood remains with us. May be, insurance may not be taken up on them anymore or for a long time to come. Then you will expect that premium to the industry will reduce. As we speak, there are a lot of temporary camps for many of our brothers, sisters and friends in affected areas, and this is a major challenge for Market Development and Restructuring Initiative (MDRI) when we look at growing the retail market. Now, if these are the people we are focusing on, small peasant farmers and rural population and they are battling for survival, insurance will be the last thing that will be in their priority list.
MDRI might suffer some little setbacks because these people will need to be re established to get a decent accommodation and guarantee survival before insurance is looked into. By and large, I believe the flood will impact on the level of premium being expected into the industry.

How prepared is the industry to mitigate the challenge thrown up by the recent flood in part of the country?

Flooding is part of what we regard as special peril and is part of the fire policy. But whether the current flooding is what we anticipated becomes another issue because natural peril is difficult to cover and that is why government is regarded as an insurer in case of natural perils. But as far as this one is concerned, a lot of the places that were affected are not major buyers of insurance yet because each time l go out l ask - Do you have any flooding claims so far reported? And many have said they do not have, because most of the affected areas (villages) are still yet to see much development.
But for a true flood, like the rain we had in Lagos some time, insurance came to the rescue – we all recall the claim from Friesland WAPCO. It is flooding but as a result of rainfall. But the current flooding is not rainfall, but as a result of other issues. So to that extent, flood is part of what we cover in insurance and each case like we say will be looked at on its own merit.
Those who are affected by flood and whose properties have been destroyed by this recent case and have insurance should put up their claims and the respective insurance companies will look at it within the ambit of the policy they have issued.

What are operators doing to enhance insurance education and awareness?

The industry is doing everything to create insurance awareness. We have Professional Insurance Ladies Association (PILA) that has continued to do awareness programme for the young ones and they have sustained the programme for these four years. The programme continued to push insurance to children who are leaders of tomorrow.
From the institute, the College of Insurance is about to take off, the Agency scheme is also on and we are encouraging more people to take up
Chartered Insurance Institute of Nigeria (CIIN) exams. If you go to the centers these days the number of participating candidates have been on the increase. At some point the institute has targeted 5, 000 new entrants, be it graduates or as agents, but we have not achieved that yet. However, it is important to set our targets and we will continue to work towards that.
When we hold the seminars and conferences these days, we try to bring up issues that affects our country and as practitioners. At the last education conference in Abuja we talked about climatic change and we had
Nigerian Meteorological Agency (NIMET) we also talked about insecurity at a time the Boko Haram was yet to assume this level.
And if we had taken all the presentations seriously, perhaps we would have been better protected today. The Institute is preparing for educational seminar in Port Harcourt and we think of making insurance count. We agreed that insurance is not counting in a lot of our corporate and personal budgets. We are engaging government as well because we cannot remove government from this.
Even in the school curriculum, we are trying to bring insurance to a lower level to make it part of the syllabus for secondary schools. If you have insurance today as a subject at WASC level, then many students will pick interest in it, know about it gradually it assumes greater proportion and
before you know it, it will begin to create value for society.

Are we expecting changes in the market following the new NAICOM guideline on premium receivables?
The circular will take effect from January1, 2013. So the effect will be felt then. It is hoped that it will resolve part of the problem we have with receivables in the industry. But whether it will totally eliminate that problem or not will be discussed by stakeholders later.

Is claims negotiation a process in the business of insurance?
Claims in insurance are premised on the understanding that premiums are paid and put in a pool where the unfortunate members of the pool are compensated in the event of loss. Everybody is contributing to it; therefore, the fund must be judiciously applied or used. When claims are made on that pool, they are not just paid but must be negotiated. If somebody experiences a situation of negotiation, l thinks it is normal. However, in negotiating, several conditions might prevail and the conditions may be that the premiums could have been paid after the risk has matured. In that case, somebody is saying is not responsible but because we know you have suffered loss, so we will give you 30 per cent. If you like it you take it, if you don’t you can go to NAICOM or NIA Complaint Bureau to make your case.
It happened with one of our clients. A ‘tokumbo’ vehicle was insured for N8 million while the market value was about N2.6 million. It was overvalued to get insurance policy. The client contributes between N5 million and N10 million premium yearly to the company. But when the vehicle got burnt and it was priced, it was then discovered that the market value was N2.6 million and we insisted on buying a new vehicle or paying the equivalent in cash, but the client insisted on the N8 million, but we refused. In our final notice we made it clear to the client that if she does not like a new vehicle or equivalent in cash she can go to NAICOM or NIA Complaint Bureau.
So, if such a client comes to you as a Journalist, you may not really understand the issues concerning the “negotiation” because each case is looked at on merit. No insurance company in this market under the current regulatory regime will refuse to pay claims. If it does, it is either the license or the person will go.

Pension operators invest over N1.74 tr in Fed Govt’s securities

Pension operators invest over N1.74 tr in Fed Govt’s securities

Chuks Udo Okonta

Over N1.74 trillion pension funds has been invested by operators in Federal Government securities Inspen has learnt.
The Head, Research and Corporate Strategy National Pension Commission (PenCom) Dr. Farouk Aminu, who disclosed this in Abuja, said the amount represents over 61 per cent of the N2.9 trillion so far contributed by workers.
He noted that over N370 billion (13 percent) has been invested in money market, while N335 billion (12 per cent) was invested in ordinary share and real estate got N167.89 billion (six per cent).    
Aminu said state government securities got N109.24 (four per cent), corporate debt security got N72.10 billion (two per cent), unquoted securities N24.67 billion (one per cent) and other investment portfolio N23.49 billion (one per cent).
He noted that the regulation on investment of pension fund assets was revised to expand the allowable investment outlets to include alternative asset classes such as: Private Equity (PE) funds, infrastructure financing (Debt instruments and funds), supranational bonds, amongst others.
He said the commission would continue to review investment regulations, adding that multiple funds would be established and ethical fund introduced. He noted that guidelines on offshore investment being worked out to encourage operators explore foreign investment windows.

Friday, 19 October 2012



Commissioners, National Pension Commission

Business Editors, here present

Executive Members of Finance, Insurance and Labour Correspondents

Chairman of Pension Operators (PenOp)

Heads of Departments of PenCom

Correspondents of Finance, Insurance and Labour, here present

Other Staff of the Commission

Distinguished Ladies and Gentlemen

I am highly delighted to welcome you to the fourth in the series of Workshops being organised by National Pension Commission for Finance, Insurance and Labour Correspondents (FICAN). We are overwhelmed by your continued commitment in attending these Workshops.  The Commission is indeed honoured by your presence despite your tight schedules.

 2  As you are aware, these Workshops had always provided the Commission with a platform to interact with the Finance Editors and Correspondents to discuss our achievements and challenges as well as receive feedback on our performance in the supervision and regulation of pension matters in Nigeria.  By so doing, we are optimistic the general public would be better informed and addressed about the Pension Industry.

3   On behalf of the Commission and the entire pension industry, I would like to express our profound appreciation to the media for your consistent support. Let me again reiterate that the media is an important stakeholder without whose support, the modest achievements recorded by the industry would not have been possible.

4   There is no doubt that the Pension Industry is one of the most reported sector in the last one year following the public hearings on the administration of pension in Nigeria.  We are pleased to note that the media had clearly distinguished the Contributory Pension Scheme (CPS) from the problems of the old scheme which were the subject of the public hearings.  This action had further promoted public confidence in the Contributory Pension Scheme. Similarly, the Commission had maintained cordial relationship with the Media and had always supported the objective reporting of issues pertaining the industry. 

5   The one - day workshop is on the theme:  Effective Administration of Benefits under the Pension Reform Act 2004’.  Four papers are slated for presentation, two from the Commission on the “Developments in the Pension Industry” by Dr. Farouk, Head of Research and Corporate Strategy Department and “Supervising the Pension Departments under the Pension Reform Act 2004” to be delivered by Mrs. Grace Usoro, Head of Public Sector Department.  The third paper is on the “Role of Pension Operators in the Provision of Efficient Customer Service Delivery” by Misbahu Yola, Managing Director, Legacy Pensions and the final paper on “Effective Reporting of the Pension Industry” to be delivered by Mr. Tony Ede, a veteran Journalist and Media Consultant.   

6   Distinguished Ladies and Gentlemen, let me set the ball rolling by sharing with you some of the salient issues in the industry since our Meeting in December last year in Enugu. The industry has continued to advance in its modest achievements as 5.28 million Nigerians had registered on the Scheme as at September this year. There are currently about 54,558 retirees from the public and private sectors under the Contributory Pension Scheme that have collected over N151.52 billion as lump sum and are collecting about N1.77 billion as monthly pension. Additionally, assets worth N2.94 trillion have been accumulated as at the end of September 2012.

7   As part of our consolidation efforts during the year under review, I am pleased to report that the recapitalisation exercise which required PFAs to raise their shareholders fund from N150M to N1Billion has been successfully completed. The Commission has aggressively intensified our compliance efforts by pursing legal action against defaulting employers. Compliance by the informal sector also received a major boost during the year with the appointment of Recovery Agents.

8   During the year under review, The Commission continued with its regulatory and supervisory philosophy, which is risk-based and consultative, Investment Regulation that would allow multiple fund is being reviewed.

9   The Commission issued the Regulation for the Transfer of Retirement Savings Account.  This document is available in the Commission’s website.  Currently, the RSA Transfer Clearing System Application which will be used to coordinate all the processes relating to the transfer of RSAs is being developed and tested to ensure that it meets the capacity and robustness required.  As part of the implementation of opening the transfer window, the PFAs and PFCs who are key stakeholders on the pensions industry will participate in various workshops geared towards ensuring their full understanding and participation in the transfer process, before the window opens. The estimated date for the opening of the transfer window is December, 2012.

10 Distinguished Ladies and Gentlemen, the Commission also continued to collaborate and engage State Governments in the implementation of the Contributory Pension Scheme in the States.  In this regard, the support of the Debt Management Office (DMO) was obtained to ensure that, as a condition, State Governments desirous of obtaining Bonds must key into the Contributory Pension Scheme.  On behalf of the Board and Management of the Commission, I would like to register our appreciation to the DMO and indeed all other Government Agencies such as CBN, SEC, NAICOM, NDIC, FIRS and BPP for their consistent support in the implementation of the Scheme and in actualising the ideals of pension reform in the Country.

11 This Workshop may be the last to be organized by the current Executive Management of the Commission as their tenure comes to an end by the end of this year.  It is therefore our hope and desire that you extend the same if not better commitment to the incoming Executive Management in order to not only sustain the achievements recorded so far, but also take the industry to greater heights.

12 On behalf of the Commission, I would like to extend our gratitude and appreciation to all those who are here with us this morning and those who made this Conference a reality.  I wish all of you fruitful deliberations and successful outcome as well as safe trip back to your respective destinations.

13 Thank you and God bless us all.  



  A presentation by:
  Abbo Mamman
  Public Sector Pensions Department
  Supervisory Purview
  Supervision of Federal Government Pension Schemes
  Recent Initiatives
  The PRA 2004 provided for the following:
  Introduced CPS for existing workers
  Exempted those that had 3 years to retire from the CPS
  Recognized obligations to existing pensioners
  Allowed the continued existence of Pension Boards & Offices as Pension Departments to administer pension & benefits of exempt persons/existing pensioners
  The Commission has regulatory oversight over all pension matters in Nigeria
  The Commission’s supervisory purview also covers the DBS operated by the PDs
  Supervision of federal government pension schemes
  The P-A-Y-G Scheme is currently in two categories:
  DBS administered by Pension Departments
  Insured Schemes of Parastatals
  Both categories are funded by budgetary allocations
  Insured schemes - administered by BOTs of the institutions while funds are released through insurance companies
  The arrangement is in violation of the PRA 2004
  Supervision of federal government pension schemes
  Efforts underway to terminate the schemes and cut over to direct payment:
  Determination of number of pensioners involved and their entitlements
  Commencement of direct payment to pensioners and reconciliation of government releases to insurance companies and payments from insurance companies to BOTs
  Dissolution of BOTs – Sec. 43 (1) & 99 (2)
  Weak regulatory framework
  Loopholes in the legal framework – Sec. 30 (1) & (2)
  Enshrined corruption, bureaucracy and lack of transparency
  Inconsistent support from the Executive and Legislature (budgets, etc.)
  Collaboration with the Pension Departments, largely ineffective
  Supervision of federal government PENSION schemes CONT’D.
  The framework for operation of PDs jointly developed was never implemented by the PDs
  Only one (MPB) out of the 5 PDs rendered regular returns until its exit from the CPS
  Preliminary assessment of each PD identified gaps in the following areas:
  Database and records management
  ICT infrastructure
  Supervision of federal government PENSION schemes CONT’D.
  Efforts by the Commission at ensuring that the PDs maintained robust database was sabotaged at high levels
  No recourse to 2006 verification exercise coordinated by the Commission
  Uncoordinated and incessant pensioner verifications by the PDs without recourse to the Commission
  Government support through annual budgetary allocations for pensioners’ verifications 
  Supervision of federal government PENSION schemes CONT’D
  Numerous complaints keep pouring in from pensioners – non/short-payment of pensions
  Requests by the Commission for the resolution of such complaints, largely ignored and not treated
  Efforts under way to strengthen the regulatory framework:
  Strengthening the legal framework - amendment of the PRA2004
  Streamlining the structure of the PDs to consolidate the Commission’s supervisory focus
  Adjusting the operational structure within the PDs to remove incentives for corruption and enhance transparency
  Recent initiatives
  Following acceptance by Government, the Commission has commenced the process of establishing the PTADs – Fed. & FCT
  Milestones achieved include:
ü  completion of the project planning
ü  design of the organizational structure and manning levels
ü  stakeholder engagement strategy and plan
ü  diagnostic review of the Police and Civil Service Pension Offices
Thank you!