NAICOM refutes report on closure of insurance firms

NAICOM refutes report on closure of insurance firms

Chuks Udo Okonta

The National Insurance Commission (NAICOM) has no plan to close any insurance firm as reported by Business Monitor International (BMI) Limited in its Nigeria Insurance Report 2012, the Commissioner for Insurance Fola Daniel, has said.

He told Inspen that NAICOM has no reason to close any underwriting firm, adding that the commission is committed to strengthening the firms for the protection of policyholders.

BMI in its report, said there are a number of bogus insurance companies that the regulator is keen to close. It noted that NAICOM is also keen to improve capitalisation and standards among the 15,000 insurance agents and 350 brokers.

It said: "Over the years that BMI has been monitoring the Nigerian insurance sector, the story has remained the same even as premiums (appear to) have grown.

"An industry that is largely ignored by foreign multinationals (with South Africa’s Metropolitan being an important exception) consists of a large number of (extremely) small, predominantly listed, indigenous insurers.

"As is explicitly noted in the discussion by NAICOM, the regulator, of the objectives for its Market Development & Restructuring Initiative (MDRI), there are a number of bogus insurance companies that the regulator is keen to close.

"The regulator is also keen to improve capitalisation and standards among Nigeria’s 15,000 insurance agents and 350 brokers, a community in which sharp practice has also been rife in the past.

"Thus far, there has been no sign that the MDRI has had a substantial and positive effect on insurance penetration or popularity in a country where 94 per cent of people are completely uninsured."

BMI noted that in relation to the MDRI, it believes that total premiums in 2012 will be about one third of the N1 trillion that was originally envisaged by NAICOM.