KEYNOTE ADDRESS BY THE COMMISSIONER FOR INSURANCE, Fola Daniel AT THE SENSITISATION WORKSHOP FOR STAKEHOLDERS ON KEY INITIATIVES OF THE COMMISSION HELD IN NEW KARU, NASARAWA STATE ON SEPTEMBER 19, 2013.

KEYNOTE ADDRESS BY THE COMMISSIONER FOR INSURANCE, Fola Daniel AT THE SENSITISATION WORKSHOP FOR STAKEHOLDERS ON KEY INITIATIVES OF THE COMMISSION HELD IN NEW KARU, NASARAWA STATE ON SEPTEMBER 19, 2013.  

Protocol,  

It gives me great pleasure to warmly welcome you to this sensitization workshop meant to promote better understanding and appreciation of the workings of the insurance sector, nay the National Insurance Commission.   

Thus, the major objective of our gathering here today is to apprise you of the key initiatives of the Commission to further enhance your understanding of developments in the insurance sector while also exposing you to the activities of NAICOM.  

I am convinced that at the end of this seminar, you would have had an improved understanding and appreciation of the issues put up for discussion.    

The Nigerian insurance industry has witnessed tremendous changes in recent times owing to the new reforms embarked upon by NAICOM. These reforms include the introduction of Risk Based Supervision, migration to International Financial Reporting Standard (IFRS) from the Nigerian Generally Accepted Accounting Principles (NGAAP); Market Conduct Reforms, Claims Settlement Reforms, Financial Inclusion, etc, all geared towards developing the industry and improving the general perception about insurance.  

Suffice it to say that these reforms are in line with the Federal Government’s vision 2020:20 of deepening insurance penetration to become the insurance industry of choice among the emerging markets in terms of capacity, safety, transparency and efficiency.  

In order to ensure adequate understanding and build capacity amongst the stakeholders, the commission did resolve to conduct series of workshops and seminars for all our stakeholders. Permit me to say that today’s programme is amongst the series of workshops and seminars earmarked to inform and educate our stakeholders towards the attainment of mutually beneficial relationship between our organisations.  

I therefore, consider this forum an appropriate channel to raise public awareness on the key initiatives of the Commission aimed at further opening up the insurance market, and by extension increase the sector’s contributions to the Gross Domestic Product (GDP) of the nation.   

To avoid the danger of repetitions, I may not go into the details of these initiatives since we have picked some of our Directors who are directly saddled with the task of driving these initiatives to speak to you.  

 It is our belief that the country is much likely to attain a sustained economic growth and development if it can adapt its insurance industry with innovative ways that will bring on board the generality of the country’s population.  

In this wise, the Commission incepted the Market Development and Restructuring Initiative (MDRI) in 2009 to among others enforce compulsory insurances and eradicate fake insurances in the country. This initiative has been vigorously pursued by the Commission across the six geo-political zones of the country. We are not hesitant to solicit your support in the implementation of compulsory insurances in Nigeria especially as regards insurances of your buildings and assets.  

Having also recognized the urgent need to develop the retail insurance market which has remained grossly untapped considering the vast population of the country, it became imperative for the Commission to incorporate micro-insurance and takaful as important vehicles for achieving greater insurance penetration in the country.  

In collaboration with GIZ of Germany and other development agencies, the Commission in 2012 conducted a Country-wide Diagnostic study on the viability of micro-insurance in Nigeria.  

One of our goals  was to generate at the end of the exercise, a document that will enable us take evidence – based decision on the issue of Micro-insurance in Nigeria and also serve as a public resource in its own right. Indeed, the report of the study reveals huge potentials amongst the low income groups and was consequently adopted by NAICOM for the development of a micro insurance framework in Nigeria.  

Similarly, NAICOM recently released the Takaful Guidelines to the market and now is ready for implementation. Preparatory to the commencement of the operation of the guidelines, the Commission has embark on series of capacity building programs for its Management and Technical staff in order to position the commission to effectively implement and supervise takaful operation in Nigeria.  

 Again, to ensure that the insurance industry leverages the Nigerian Oil and Gas Content Development Act 2010 to further expand its market, the Commission developed a guideline for the industry. The guideline serves as a roadmap on how oil and gas insurance business should be conducted in Nigeria.   

As part of our continuing efforts at protecting the interest of policyholders, the Commission indeed strengthened its Complaints Bureau Unit. The human and material capacity of the unit has been substantially enhanced to meet with the challenges of dealing with complaints emanating from the public against the industry promptly and professionally.  

Also, in order to put a stop to the vexed issue of delayed or non-payment of insurance premium by the insured, the Commission commenced the implementation of section 50 (1) of the Insurance Act 2003 on January 1st 2013. This law stipulates that “the receipt of an insurance premium shall be a condition precedent to a valid contract of insurance and there shall be no cover in respect of an insurance risk unless the premium is paid in advance”. Invariably, it presupposes that no insurance cover shall be granted by any insurance company without having received the premium.  

The on-going implementation of this law has significantly improved the cash flow of insurance institutions in the country. It is expected that this positive turn of events would impact on the capacity of operators to settle claims promptly, thus removing a major sore point in the relationship of insurance consumers and service providers.  

In conclusion ladies and gentlemen, let me reiterate that the Nigerian insurance sector has great potentials for massive growth. You will agree with me that the population size of the country, if adequately harnessed, gives an added advantage to the insurance industry to further develop its market.  This is what we intend to achieve with the various initiatives incepted by the Commission in recent times. We will definitely appreciate the unflinching support and cooperation of all of you – our stakeholders in this drive.  

 I thank you all for finding time to be with us notwithstanding our very busy schedules and do hope that there will be value-added at the end of the day.  

 Thank you.

 Fola Daniel Commissioner for Insurance