Why insurers are sanctioned, by NAICOM

Daniel

By Chuks Udo Okonta

Erring insurers are sanctioned to protect policy holders and shareholders the Commissioner for Insurance Fola Daniel, has said.

He told Inspen that sanctions are not punitive, adding that despite the outcry over its perceived highhandness by some operators, the commission would not condone any misdeed.

He said the commission would continue to encourage global best practices to ensure that operators align with their foreign counterparts. He said insurance is a universal business and that those abroad would not have to wait for local operators to develop gradually.

He said: "Our sanctions are largely remedial. What is upper most in sanctioning an insurance company is the protection of policy holders. If I sanction an insurance company and put it on the papers of newspapers, without obtaining a remedy, how does that help the policyholder? But if I can effectively sanction an operator and the interest of policy holder is fully served, that means we are doing the right thing.

"I assure you that we are not sweeping anything under the carpet or shielding any operator. As a matter of fact in the last three months, I think there has been shout and cry from the industry about our sanctions we have given to errant operators."

He noted that the commission would continue to ensure that companies live up to their responsibilities, adding that several initiatives had been taken to reposition the industry.

Daniel said efforts were being made to enable insurers tap into the enormous potential in the country. He said the industry has the capacity to be ranked among the top six developed sector across the globe, noting that the nation’s natural resources and population are great potential for growth.

He noted that life insurance remains one of the driving force of insurance as it provides long term fund for operators. He said NAICOM would also enable operators go to the grassroots where there are enormous untapped insurance opportunities.

He said over 50 million of the nation’s population are adults, who should have life policy, noting that if they should subscribe to life policies, that would amount to fabulous income for life insurers.

He said opportunities exist in agriculture, oil and gas and other sectors, noting that the industry was being reformed to enable operators avail themselves of the opportunities.

He said the action taken by the commission to improve income in the industry was the arrest of fake insurers, Market Development and Restructuring Initiative (MDRI), Micro-insurance, Takaful and more. He urged insurers to leverage on the opportunities created through some of its programmes, such MDRI.

He said the government through the Nigeria Content Bill, which empowers insurers to underwrite 70 per cent risks in the country has paved the way for insurers to improve their operations.

"We have a capital, which is in excess of N600 billion and the industry is not generating the capital, which means that we are under-trading. The operators have been trying to jog, but now, we are no longer going to jog but run.

"We have moved very slowly as an insurance industry. We have been walking and in the last four years, we attempted to jog. We are no longer going to jog, but we are going to run," he added.