NAICOM is constrained by poor legal framework, says Daniel

NAICOM is constrained by poor legal framework, says Daniel

  The various initiatives and reforms being embarked upon by the National Insurance Commission (NAICOM) is constrained by poor legal framework, poor public perception of the insurance, low awareness amongst the populace, the Commissioner for Insurance Fola Daniel, has said.

 Daniel who spoke at a two-day sensitisation retreat for members of the House of Representatives Committee on Finance in Karu Nasarawa State, said the retreat was to provide a platform to interact with the honourable members with a view to having a better appreciation of the challenges posed by weak legal framework for the regulation and supervision of the insurance industry in Nigeria.

He said: “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."

 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.

The Commissioner also informed the members that "the Bill consolidates and harmonizes the various existing legislation for effective and efficient regulation, supervision and sound insurance practice in Nigeria. The existing legal framework often creates uncertainty in underwriting processes, regulatory inconsistencies, conflict of laws, etc.”

He noted that a similar retreat was held in December 2011 in Calabar, for members of the Senate Committee on Banking, Insurance and other Financial Institutions to apprise them of the new draft bill.

Chairman, House of Representatives Committee on Finance Abdulmumin Jibrin thanked the Commission for organising the retreat saying that the sensitization retreat has afforded them the opportunity to be exposed to the workings of the Commission

According to the Chairman, the committee is ready to support the commission 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."

Facilitators at the retreat were drawn from the federal ministry of Justice, that of Finance, and the insurance industry. Speaking on the topic “Overview of the Insurance Consolidated Bill” Lanre Laoshe, Chief Executive Officer, Leverage Insurance Brokers Limited, said when eventually passed into law, the new draft bill has the potentials to drive the Nigerian Insurance Industry to a level where it could rank amongst the best in the world.