Festus Akanbi
Contrary to the fears in some quarters that the planned stoppage of budgetary allocation to the National Insurance Commission (NAICOM) by the Federal Government by 2014 will leave the commission in financial mess, Insurance Commissioner Fola Daniel has said there is no cause for alarm.
Minister of State for Finance Yerima Ngama had last week said in Abuja that the NAICOM would stop receiving budgetary allocations from 2014.
Ngama stated this at the inauguration of new members of the governing board of the commission.
However, the insurance commissioner, who spoke with THISDAY at the weekend, said NAICOM had put adequate measures in place to remain self-sufficient.
Explaining that government’s decision did not come as a surprise, Daniel said long before the Federal Government voiced out its decision to stop financial support to NAICOM, the commission had been remitting funds to the national treasury.
"We can fund ourselves. In 2012, we remitted over N1 billion into the government treasury. "The government’s decision is a good thing for us because the government has many responsibilities pressing for attention. We believe that the resources being allocated to us can be channeled elsewhere," the commissioner said.
On the state of the insurance industry, which the minister said was uninspiring despite the fairly large number of licensed operators, the commissioner said his commission had identified the need for the growth of micro insurance to capture potential subscribers from the grassroots.
As a demonstration of this resolve, the commission recently held a seminar on micro insurance, which attracted participants from about 20 countries.
Insurance, according to him, can only grow when all sectors of the society are carried along.
The minister of state, while justifying the planned stoppage of funding for the insurance commission recalled that the federal government started financing the commission’s capital and overhead expenditure when it was set up because there weren’t enough insurance companies in the industry paying levies.
"And from time to time, government supports the commission as its internally-generated revenue grows,’’ he said. "But today, the industry has grown and is healthy; we believe that as from next year, NAICOM, just like the Central Bank of Nigeria and NDIC, should be able to generate enough internal revenue to embark on their activities without any budgetary support from the federation account.’’
According to him, a strong insurance sector is key to achieving the nation’s vision of being among the top 20 economies of the world by 2020.
"We have to reposition the insurance sector in order to provide the services needed by one of the 20 largest economies in the world," he said.
"Right now, insurance penetration is very low and we need to make insurance products very attractive because this is a source of capital, which we have not tapped."
Source: Thisday
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