Commissioner for Insurance, Mr. Fola Daniel
Come July this year, the incumbent Commissioner for Insurance, Mr. Fola Daniel will bow out of office having completed his eight-year tenure. Ebere Nwoji, in this report, reviews the insurance industry under his watch.
The outgoing commissioner for insurance, Mr. Fola Daniel will as long as the history of growth and development of Nigerian insurance industry is told be remembered for his immense contributions to the industry .
Daniel who paddled the leadership canoe of the insurance industry regulatory body, the National Insurance Commission (NAICOM) as the commissioner for insurance and chief executive officer between 2007 and 2015 has been adjudged the best commissioner the industry has had so far.
Indeed, his eight year tenure as the helmsman of the industry 's regulator was described as the golden era of the industry because of the zeal, dynamism and discipline he brought to bear in the industry.
Achievements
The first evidence of positive changes in the industry since his tenure in NAICOM was seen in the bountiful premium income reaped by the industry within the eight year period of his regime.The industry's premium as at the year 2007 when the outgoing commissioner took position as the commissioner for insurance was less than N100 billion .
But last year, audited account of the industry showed that the industry's premium has hit over N300billion margin. Operators are even optimistic that going by the unaudited account of the industry in the first quarter of this year, despite the political activities that disrupted businesses in the industry, the figure is likely going to double as unaudited account of some operating firms in the system for first quarter this year showed that some firms have tripled their first quarter premium last year.
A review of activities in the industry during this golden era shows that the out going commissioner is the first commissioner for insurance that peacefully finished his tenure.
He has among other things brought sanity, peace and harmony among the various trade groups in the industry as well as peace between the regulator and the operators.
The industry operators described his regulatory tactics as superb and one meant to save the lives of dying firms.
Some whose companies' lives were in bad shape during the shake up in the banking sector during the tenure of Mallam Sanusi Lamdo Sanusi as Central Bank Governor, said but for Daniel's intelligence and right sense of judgement, by now many insurance firms would have been in grave but that the industry regulator, under Daniel, decided to remain independent in its decisions and refused to copy the bank regulator showing his understanding of fragile nature of insurance industry.
This he was able to boycott many court cases that would have risen on account of regulator descending on operating firms for license withdrawal as witnessed in the industry before. It is on record that the Fola Daniel regime met several court litigations on ground when it came on board.
These litigations arose from disputes between individual companies and the regulator especially over recapitalisation and consolidation.
Some were between the various trade groups in the industry such as Nigera Insurers Association (NIA), which is the umbrella body of Insurance underwriters and the Nigeria Council of Registered Insurance Brokers(NCRIB), which is the umbrella body of insurance brokers in Nigeria.
Even the recapitalisation exercise conducted by the first commissioner for insurance, Chief Oladipo Bailey was not without court litigations, but the era of Daniel witnessed peace and harmony between the various interest groups.
The only two cases that would have erupted, which were the controversy between underwriters and brokers over percentage of commission was amicably resolved by the commission. Also the issue between the underwriters and loss adjusters over wages was also resolved peacefully by the commission.
Daniel's regime also brought sanity into the system and successfully called some misbehaving market operators to order especially in the area of price wars as he made it clear to such operators that irrespective of the low premium they charged, they must pay claims when they come.
His regime also saw the upliftment of status of Nigerian Insurance Industry in the eyes of foreign and indigenous investors.
Before now, investors did not see insurance stocks as one worth investing in, but before the 2008 melt down in the global financial system, insurance stocks became one of the most beautiful brides in the eyes of investors.
Also, Nigerian insurance industry till date has remained the toast of foreign investors as today ,we have global investors like AXA, Od Mutual, Sanlam among others investing in Nigera.
In his long walk to change the status of the industry from a non competitive to a global competitive market, Daniel had employed some regulatory measures to among other things make Nigerians understand and see insurance from a positive perspective and understand it.
Before then, many Nigerians because of the prevailing insincerity and indiscipline among insurance industry operators saw Nigerian insurance industry and its managers as group of dubious people that are in business to extort money from people only to run away when claims occur.
But Daniel started by educating the people on what insurance is , their rights on any insurance contract, the need to read and understand their policy documents as well as how to press for their claims payment and the benefit inherent in insurance contract.
It was during Daniel's regime through his war against fake third party motor insurance that Nigerians were made to understand that third party motor insurance claim is payable and could be as high as N100,000
Daniel started his regulatory duty from the area it will protect the interest of the consumers as well as in seeking protection for the insuring public to save them from the risk of falling victims of various malpractices that were prevalent in the industry.
He classified his primary duty, which is regulation of the industry as a public interest business that should involve protection of consumers of insurance products and ensure that promises made by insurers are kept.
Indeed his regulatory activities in the industry were carried out under three main headings of policy holders' protection, financial safety and stability as well as market development.
Policy holders' protection
In a deliberate bid to protect policy holders against activities of fake and dubious insurers who collect premium from the insuring public only to disappear when claims occur, the commissioner embarked on consumers’ education through seminars, workshops, sponsorship of TV/Radio drama, social media and other public enlightenment programmes.
Still on mass education, he successfully prevailed on the Federal Ministry of Education to include insurance as a subject of study in senior secondary schools in the country .This is to prepare the minds of the up coming generation on insurance to make them understand its benefit and patronise the industry as well as make them love to study insurance in tertiary institutions. This is in addition to impact of the commission in some tertiary institutions in the country.
Other activities carried out by the commission in its bid to protect the consumers include market conduct regulations through enforcement of fair treatment to customers during pre-sales and after sales services,risk pricing and eradication of fake insurance products through arrest, investigation and prosecution of fake insurance sellers.
He also enthroned the regime of sound accounting and disclosure requirements in line with IFRS (Liability Adequacy Test, Asset Liability Management) as well as enforced prompt claims settlement and established consumer protection unit and a call centre for easy access by the insuring public to the commission for complaint.
The regime of the outgoing commissioner took Financial safety and stability of the industry through recapitalisation and consolidation as its first area of priority shortly after resumption of duty.
Here, the commission carried out the following activities: enforcement of Minimum Solvency Margin and capital base requirements.
Provision of leadership for the industry’s seamless transition to IFRS in line with federal government roadmap, formulation of policy on premium collection and remittance (NPNC), investment regulations; including issuance of guidelines on divestments, regulations on investments of policyholders’ funds among others.
The issue of market development was one of the highlights of achievements of the outgoing commissioner, which he did through the Market Development and Restructuring initiative(MDRI).
Through this, he was able to implement the compulsory insurance which has been lying down for years in the insurance act file without implementation and this has seen the commission slating five compulsory insurances for implementation although it is still battling with the enforcement proper.
The commission also through the initiative fought against fake insurance institutions in the country, which had remained a lingering problem for the industry. It also enthroned a new regime of premium collection in the industry tagged: No Premium No Cover, thereby liberating the operators from heavy weight of outstanding premium, which they carried about in their account books year in year out.
In the industry today, the insuring public have known that insurance contract is purely based on payment of premium before cover is given.
The commission has also through the initiative created several jobs through the agency system.
Other achievements recorded by NAICOM through the initiative include achievement of Financial Inclusion among Nigerians through Takaful and Micro insurance regulations for poverty alleviation;
Enforcement of local content development particularly in Oil and Gas industry through the issuance of Guidelines on Oil and Gas Insurance business in Nigeria among others.
Other programmes lined up by Daniel's administration in a bid to reposition the insurance industry and give it a word class standard stature for global competition include Enthronement of e- regulation regime, which will witness the regime of portal system of supervision, use of supervisory data base, business process management for (A& P Inspectorate), regime of Enterprise Resources Planning (ERP) – Finance and Accounts and Admin. & HR), establishment of Back-Up Data Centre in Lagos, Visitors management System, transition to Risk Based Supervision and self Risk Base Frame work among others.
It is not certain if the outgoing commissioner will implement the above lined up programmes before his exit in August this year but as he has often said, succession plan has been built in the system to the extent that nobody is indispensable in the commission so that in the absence of any personnel in the commission, his successor will be able to do what he was doing.
Setbacks
Despite these achievements, one major thing, which certainly Daniel would have loved to see happened but which never happened in his tenure though to a reasonable extent he has laid enough foundation for its achievement is the transformation of the Nigerian insurance market into trillion Naira market. This was a major target he set in 2009 during the launch of MDRI.
Daniel had projected that by 2012, the insurance industry's premium income would have hit trillion Naira margin but till date this has not happened prompting him to set a new target of 2017.
Again, Daniel's regime as the commissioner for insurance could not see the end of fake insurance as there are still places where the fakers roam about but the fact remains that his regime went far in fighting against that.
Also, his regime could not see the effectiveness of market agreement, which some operators have been yearning for over the years .This is so because each time the agreement is made some operators would back out arguing that it is a free market where every one sells as it is convenient for him.
Despite these , operators have given the out going commissioner a pass mark, wishing that his tenure could be extended.
Managing Director Africa Alliance, Mr. Alphonse Okpor, described the outgoing commissioner as an effective regulator. Group Managing Director Mutual Benefit Assurance,
Mr. Akin Ogunbiyi simply described him as a good regulator, while the Managing Director Nigeria Agricultural Insurance Corporation (NAIC), Mr. Bode Opadokun, described him as a listening, considerate and experienced regulator.
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