Nnamdi Duru examines the position of the new body for insurance brokers, the Association of Professional and Practicing Insurance Brokers of Nigeria (APPIBON) on grievances among members and the argument that brokers' bodies should be allowed to exist side by side.
The insurance industry in Nigeria is divided into four sub-sectors, the underwriting arm, which comprises the insurance companies; broking arm; agency arm; and the loss adjusting arm.
While the Nigerian Insurers Association (NIA) is the self-regulatory body for underwriters, the Association of Registered Insurance Agents of Nigeria (ARIAN) is the umbrella body for agents operating in the market. Loss adjusters plying their trade in the industry have their own umbrella body, the Institute of Loss Adjusters of Nigeria (ILAN), while brokers belong to the Nigerian Council of Registered Insurance Brokers (NCRIB). The Chartered Insurance Institute of Nigeria (CIIN) is the only professional body for all professionals plying their trades in these sub-sectors.
However, in recent times, the broking arm of the industry has been polarised and the peace and unity among insurance broking fraternity, the basis for self-regulation in the broking arm of the country's insurance industry is now under threat. This is because of the growing animosity among some members of the profession.
In pursuit of their right to freedom of association, the aggrieved brokers have since opted out of the Nigerian Council of Registered Insurance Brokers (NCRIB) and set up a parallel body, the Association of Professional and Practicing Insurance Brokers of Nigeria (APPIBON) to self-regulate them.
APPIBON was established three years ago and currently has about 50 registered members with operational headquarters in Abuja, while NCRIB, is over 50 years with membership strength of over 500, making it perhaps the largest brokerage fraternity in sub-Saharan Africa. Founded in 1962 as a non-profit making organisation limited by guarantee, the Nigerian Corporation of Insurance Brokers was renamed NCRIB following enactment of the NCRIB Act, 2003.
Grievances of APPIBON Members Outlining the grievances of members of the new body during the inaugural meeting of the Lagos chapter of the association, the President of APPIBON, Mr. Delly Ajufo said, the leadership of NCRIB is highhanded and alleged that out of greed, the leadership of the trade group has continued to fleece other brokers without any consideration for their financial status.
Also, some insurance brokers have accused the NCRIB leadership of creating and sustaining a privileged group among its members through the award of fellowship of the body. They said the leadership has been reserving some classes of businesses for themselves and other fellows of the council by setting unnecessary hurdles before other brokers thereby hindering them from participating in some juicy businesses in the country.
The aggrieved brokers were particularly irked by the fact that there is no objectivity in the award of NCRIB Fellowship. It is neither based on examination nor excellence in the broking profession, they complained.
"There is no basis for the award of NCRIB fellowship. If the leadership likes your face or you are their friend, they will nominate you for fellowship but if they don't like you face you cannot be a fellow. They award fellowship to themselves and their friends and go ahead to reserve some of the juicy businesses for only NCRIB fellows. This is injustice," an aggrieved member who pleaded anonymity protested.
Genesis of Crisis This crisis is fuelled by NCRIB Act, 2003, which empowered the council to maintain a register of its members and regulate their activities (not all insurance brokers). In the course of enforcing this provision, NCRIB then challenged the authority of NAICOM to regulate insurance brokers in Nigeria.
It argued that its enabling law is the most recent and as such superior to the Insurance Act, 2003 which empowered the commission to regulate and supervise all operators in the country's insurance market. This bold face did not go down well with NAICOM under the then Commissioner for Insurance, Chief Oladipo Bailey. So the two institutions remained in court until Bailey left office.
The case dragged on throughout the tenure of Chief Emmanuel Chukwulozie as Commissioner for Insurance and with time the two organisations opted for an out of court settlement.
One of the terms of the settlement was that insurance brokers in the country must register first with NCRIB, after which the council will submit a list of eligible insurance brokers registered by it to the commission for certification.
This gave the council monopoly over registration of insurance brokers in the country, as against provisions of Section 100 of the Insurance Act as enumerated above, relevant provisions of the NCRIB Act which empowered it to keep a register of its members only and the freedom of association as enshrined in the Nigerian constitution.
In addition to creating an unnecessary monopoly in the insurance market, the terms of settlement imposed more certification conditions on insurance brokers at great cost since they have to meet all the conditions set by NCRIB and NAICOM respectively.
Constitutional Breaches The aggrieved brokers also noted that in addition to denying a cross section of insurance brokers in the country their right to freely associate with whosoever they wish to, the insistence on membership of NCRIB by NAICOM is at variance with statutory provisions making the Insurance Act, 2003 superior to any other insurance law in the country.
Ajufo likened the relationship between NCRIB and APPIBON to that of other trade groups like Nigerian Labour Congress (NLC) and Trade Union Congress (TUC), insisting that his own group should be allowed to exist and add its own value to the growth of the industry. "Any attempt to compel practitioners to join NCRIB is at variance with the laws of the Federal Republic of Nigeria; specifically Section 40(3) which dwells on the fundamental rights of every Nigerian to freely associate with whosoever he or she chooses.
Secondly, Section 100 of the Insurance Act states that where any other law is inconsistent with the Act, the Insurance Act will prevail to the extent of the inconsistency," he pointed out.
According to him, the parliament anticipated that other insurance laws could have provisions challenging the commission's authority and gave a stamp of authority to the effect that even at such an occurrence, such laws should not override the Insurance Act. The APPIBON president further noted with regret that "the commission is quick to accept that the NCRIB Act is superior to its own law in spite of the provisions of the Section 100 of the Insurance Act."
NAICOM's Complicity The aggrieved insurance brokers picked holes in the conditions set by the insurance regulator for certification of brokers, saying it is encouraging monopoly by aligning with NCRIB to say that unless they are members of the council, they will not be certified to operate in the country's insurance market.
Ajufo faulted the condition for this certification of insurance brokers, insisting that the commission had no right to compel any insurance broker to join NCRIB before certifying it to ply their trade. He argued that this requirement has no basis and would be strongly resisted by APPIBON members.
"Before the advent of the currently leadership of NAICOM, requirements for renewal of our broking certificates were less than 14. Today, it has increased to almost 27, all of them costing money; thereby impoverishing the already beleaguered broking arm of the industry. "The straw that has come to break the camel's back is the requirement of membership of NCRIB as a condition for renewal of certificates of insurance brokers. To this, we say foul. It cannot happen and it will not happen," the APPIBON president vowed.
The aggrieved brokers alleged that it was out of greed that the leadership of NCRIB deceived NAICOM into giving their urge to continue fleecing insurance brokers in the country a legal backing.
They also observed that the series of new hurdles set for insurance brokers by their regulator would further impoverish the practitioners.
Reconciliation The APPIBON president recalled that the Commissioner for Insurance, Mr. Fola Daniel had advised his group to dialogue with NCRIB on their grievances, saying the outcome of the meeting confirmed his fear that NCRIB was only out to fleece insurance brokers.
"NCRIB advised that APPIBON should fold up and return to their fold with a promise that any outstanding dues owed by members of APPIBON would be written off. They just succeeded in confirming our long held belief that rather than provide service to its members, they were just interested in fleecing unsuspecting members of their hard earned income," Ajufo said.
On the way forward, Ajufo said: "This ugly state of affair can be addressed on a round table in the interest of the beleaguered insurance industry as series of legal actions to resolve this matter will obviously impact negatively on the sub-sector and erode whatever confidence (if any), the public has regarding insurance and its practice in Nigeria."
Ajufo also stated his conviction that only a meeting between stakeholders in the industry for a dialogue on this issue with a view to allowing them to play their roles without any hindrance and to save the entire insurance industry in Nigeria the trouble and embarrassment associated with avoidable litigations.
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