SOME insurance experts Wednesday, urged the Central Bank of Nigeria (CBN) to reconsider its policy and directives on bancassurance.
They told the News Agency of Nigeria (NAN) in separate interviews in Lagos that bancassurance, contrary to other opinions, remained a veritable channel of marketing insurance products to the populace.
A former President of Chartered Insurance Institute of Nigeria (CIIN), Fatai Lawal, said the CBN current policy on bancassurance had robbed the insurance industry of an effective vehicle of distributing insurance products.
"Bancassurance is neither an insurance product nor a means for banks to do underwriting business. It is a channel for distribution of insurance products.
"Insurance companies may not have branches everywhere in the federation but banks do because of their peculiarities. That is why it is an attractive means of taking insurance to areas that ordinarily they cannot go," he said.
Also a former CIIN President, Sunny Adeda, wondered why CBN should give such directive when it was not part of the licensing of commercial banks.
According to him, the guidelines for licensing commercial banks provide for holdings structure or divestment for banks owning insurance companies.
"These guidelines are being followed as First Bank of Nigeria opted for a holding structure with all its subsidiaries including the insurance company.
"Guarantee Trust Bank opted for divestment and Mansard Insurance Plc is the outcome of that decision, likewise First City Monument Bank Plc and Union Bank of Nigeria Plc.
" The new directive means that the CBN had banned the channel of selling insurance products to many Nigerians most of whom are disadvantaged," he also told NAN.
Adeda said that bancassurance helped insurance companies to get more clients, using the reach of existing commercial banks.
According to him, it is like using the telecommunications platform to reach many Nigerians who are at the mercy of fake insurance agents.
He said the directive on the face value would reduce the product line of insurance companies.
Adeda said it would not however affect the companies in terms of value.
He said that while the practitioners and regulator figure out what to do, the companies involved should obey the directive.
"Before the issue is resolved the companies should look for other ways to sell their products."
President of Institute of Loss Adjusters of Nigeria (ILAN), Lebi Omoboyowa, said it was a welcome relief when the guidelines for licensing of commercial banks came out and one of the requirements was divesting from insurance companies.
He said the banks were obeying the guidelines as they had almost divested from their insurance companies.
"This new directive on bancassurance was not part of that guideline".
"I think the industry will take it up as it will reduce the much talked about insurance penetration in the country which is very low.
"In other climes, banks are avenues to sell insurance products and that does not mean they have a become underwriters. It is just a business strategy to reach millions of banking customers.
"The banks do not sell the products on behalf of insurance companies but insurance marketers do," he said.
Omoboyowa said there must be a reason for the directive from CBN as it was not part of the guidelines for licensing of commercial banks.
NAN reports that CBN had in July 2014 directed banks to obey the 2010 regulation barring them from indulging in non- permissible activities, including underwriting/bancassurance.
NAN
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