Insurers write to cancel move for parallel regulator

The brokerage arm of the insurance industry has written a formal letter to the House of Representatives, giving notice of its withdrawal of the bill seeking its transformation into a parallel industry regulator.

This follows a recent agreement in priciple to withdraw the proposal.

In a letter to the House of Representatives, the brokers’ association, the Nigerian Council of Registered Insurance Brokers (NCRIB), gave notice of the withdrawal of the bill seeking its transformation into another regulator in the industry.

Cracks had appeared in the industry, with the decision of the insurance brokers to self-regulate.

The brokers, under the umbrella of the NCRIB, pushed for an act in the National Assembly to create an Institute of Chartered Insurance Brokers and transform it from its current status of market association, to a regulator.

The bill was enrolled this year in both chambers of the National Assembly and had passed through second reading in the two houses. It was sponsored by Gbenga Kaka in the Senate and Uzoma Nkem-Abonta in the House of Representatives.

There were however reservations from within the NCRIB and opposition from the educational arm of the industry, the Chartered Insurance Institute of Nigeria (CIIN) which also protested to the federal lawmakers about the implication of a parallel regulator.

In the letter dated December 18, and signed by its president, Ayodapo Shoderu, the NCRIB indicated that it was no longer interested in the bill and noted that it has also notified the Senate President about its intention to withdraw it.

The letter titled “withdrawal of NCRIB proposed bill before the National Assembly”, sent to the speaker, Aminu Tambuwal, and copied Jibrin Abdulmumin, the chairman, House Committee on finance, stated, “we refer to the above mentioned bill submitted by our council sometime in October 2014 to the National Assembly, seeking amendments to the NCRIB Act 21 of 2003, and which had undergone second reading at the Senate, before our governing board decided to withdraw it.

“In the same vein, we hereby wish to notify the House of Representatives to stop further action on the bill”.

Section 2 of the bill which states the duties of the institute if the act is approved, has been condemned by operators who say it is tantamount to running parallel to the industry regulator, the National Insurance Commission (NAICOM) and the educational arm of the industry, the Chartered Insurance Institute of Nigeria (CIIN). These two bodies are a creation of an act of parliament.

Duties of the institute according to Section 2 of the bill include, establishing and maintaining a central organisation for all insurance brokers, and “enrolling persons as chartered insurance brokers.”

Others are, to secure in accordance with the provision of the act, the establishment and maintenance of a register of chartered insurance brokers, containing the names, addresses and qualifications and such other particulars as may be prescribed, of all persons who having applied in the prescribed manner, are entitled under the provisions or the act, to be registered, and the publication from time to time, of the lists of these persons.

Protests stall N625m insurance for unity schools’ pupils

The Federal Government may have rescinded its decision to hire NICON Insurance Plc to insure 125,000 pupils in 104 unity schools across the country.

The insurance cover is intended to mitigate the consequences of the Boko Haram insurgency and other forms of insecurity in the country, especially the attack on educational institutions.

Under the scheme, each pupil is expected to pay N5,000 premium per annum. This means that the company will be raking in N625m from the schools’ 125,000 pupils’ population.

It gives NICON Insurance the power to be the sole underwriter of the policy in all the 104 unity schools scattered across the country.

However, our correspondent learnt that following the protest by some parents against the insurance scheme, the government was considering a rethink.

At the Federal Government College, Jos, the parents were asked not to pay the money. It was supposed to have been paid alongside school and other sundry fees this second term.

But a text message to the parents by the school authorities and the Parents Teachers’ Association asked parents to ignore the notice to pay, though no reason was given for the new directive.

A teacher in the school, who spoke on the condition of anonymity, however told our correspondent on Sunday that the protest from the parents was very loud and vehement.

He said, “The government is afraid of a possible backlash from the scheme because nobody was taken along in the decision process. Move over, it was their view that it was not meant to achieve anything tangible but just to enrich one man.

He described the new policy as a failure on the part of government to protect its citizens.

NICON Insurance, which once belonged to the Federal Government, was sold to business mogul, Mr. Jimoh Ibrahim, a chieftain of the Peoples Democratic Party in 2006.

“The Students Welfare Insurance Scheme for Unity Schools is a product designed by NICON Insurance to provide the much-needed benefits under a combined personal accident and life cover for the pupils and their sponsors,” NICON spokesperson, Ade Adesokan said.

According to the company, in the case of accidental death of a pupil, the sponsor named in the policy will be entitled to N500, 000. In the event of the death of the sponsor or guardian of a pupil, the pupil will be entitled to the payment of school fees up to the year of graduation from the secondary school (maximum of N500,000).

“In the case that a pupil accidentally sustain permanent disability, he/she will be entitled to N500,000 as compensation. For accidental medical expenses, a pupil will be entitled to N50,000 for medical treatment.

“If a pupil is involved in an accidental death, the company will pay N50,000 for burial expenses,” Adesokan added.

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Nigeria: Re-Engineering the Insurance Sector

As part of efforts to urgently diversify the economy and stimulate employment generation, the federal government has introduced a three-year agenda to transform the insurance sector. Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala recently unveiled the road map that could have Gross Written Premiums (GWP) in the sector increased to N1 trillion from the current N300 billion, within the next three years and further to N5 trillion in the next decade.

The federal government intention is to replicate the success achieved in both the banking and pension sectors of the economy within the past decade. The idea is to liberalise the insurance sector for enhanced private sector involvement as well as the creation of huge job opportunities. Okonjo-Iweala had stressed the need to unleash latent energies in the insurance industry to create more jobs and boost economic development as one of the strategic actions to bridge the gap caused by the current economic challenges facing the country as a result of dwindling oil prices.

Part of the current strategies has been to further empower the National Insurance Commission (NAICOM) to enforce a compulsory insurance scheme across the country as well make insurance compliance a key requirement for accessing some benefits from government, including renewal of documents. According to the Commissioner of Insurance and NAICOM boss, Mr. Fola Daniel, misconceptions and lack of awareness constitute a major limitation to the growth of insurance in the country.

However, infractions on the part of insurance operators with dismal records of claims resettlement have helped to dampen the fragile confidence the people have in insurance products. In the words of Okonjo-Iweala, the insurance sector in Nigeria is still characterised by "lack of consumer trust, a fragmented industry with some weak and insolvent players, low enforcement of compulsory insurance policies, lack of professionalism by some agents and brokers in the industry, and a general shortage of skilled professionals in the entire industry."

This has no doubt limited the huge potential in the sector as ordinary citizens who make up the huge market in the informal sector of the economy no longer have regard for insurance. For instance, the current third party vehicle insurance cover only serves as ceremonious document to satisfy regulatory and compliance demand for vehicle ownership. No claims are ever paid in the event of an accident, however minor it is. Worse still, no refund is ever made to policy holders if there were no incident. It is however welcoming to hear that as a way forward, policies would now ensure that people can return a policy if it does not suit them and get their premiums refunded.

If anything, efforts to boost confidence in the insurance sector by ensuring improvement in payment of claims which is currently estimated at only about 25 per cent against 90 per cent in the United Kingdom is welcoming and would enhance the industry's contribution to Gross Domestic Product (GDP) which is currently at about 0.4 percent. However, in achieving the above objectives, institutions like the Federal Road Safety Corps (FRSC), the Physical and Inspection Section of the Federal Ministry of Works, PENCOM and other regulatory institutions must be alive to their responsibilities. There is also the need for the expansion of the market in the rural areas as obtained in other African countries like South Africa and Morocco other countries.

Finally, in a country where the level of financial literacy is still poor, embarking on massive awareness campaign to sell insurance benefits as well as disabusing people's minds of misconceptions about insurance is a major way forward. This would ensure that people properly understand and appreciate the variety of products which would be offered in the ongoing efforts to revive the sector.

Consumer forum fines insurance company for not ‘keeping promise’

DEHRADUN: The Dehradun District Consumer Dispute Redressal Forum has slapped a fine of Rs 35,000 on a leading insurance company for not fulfilling the promises it made while selling a policy to an Indra nagar resident. "The insurance company failed to fulfill its promises made by the company's executive to the complainant at the time of selling the policy. There was no mention of the benefits, which were promised to the complainant, in the insurance policy cover note given to him once he bought the policy," said an order passed by District Consumer Dispute Redressal Forum. 

The verdict came in favour of Sanjay Thakur, resident of Indra Nagar Colony. According to the complaint, in March 2012, he was approached by a company executive, who persuaded him to buy a policy. The executive told him that the policy will have benefits such as 20% cash back on annual premium of Rs 2 lakh, medical cover for 15 years, Rs 900 each as monthly scholarship for two children's and gift vouchers worth Rs 5,000. 

However, Sanjay was shocked when he received the cover note of the insurance policy after paying Rs 20,000 to the company. There was no mention of the above benefits. Not happy with the company, Sanjay Thakur filed a complaint in the district consumer forum on May 29, 2013 seeking compensation. 

Over 2000 companies certified for contracts in 2014 by Nigerian pension agency

The National Pension Commission (PenCom) says it certified a total of 2,146 companies to bid for Federal Government contracts this year after they provided evidence of compliance with provisions of the Pension Reform Act 2004.Nigeria’s National Mirror newspaper said in a report on Friday that the noted that the development was good as only 1,163 employers were issued the compliance certificate by PenCom in 2013, while 852 and 559 firms were issued the certificates in 2011 and 2012 respectively.

The report said that PenCom had been publishing the list of companies issued certificates of compliance with the Pension Act in compliance with Section 16 (6) (d) of the Public Procurement Act 2007 since 2011.

Although compliance certificates are issued only to organisations seeking to bid for Federal Government contracts, PenCom says it believes that if efforts are made to ensure compliance with this provision of the law, more employers would definitely be obeying the pension law in the country.

It explained that compliance with the Pension Act, at minimum; include ensuring that all employees open Retirement Savings Accounts (RSAs), with the Pension Fund Administrator of their choice; remitting both employer and employee pension contributions to the appropriate Pension Fund Custodian not later than seven days from the date of payment of salaries.

“In accordance with this requirement that all organisations wishing to bid for any contract with the Federal Government MDAs must provide evidence of implementing the Contributory Pension Scheme, PenCom added, saying it has constantly been updating the list of organisations that have been issued compliance certificates,;; the report added.

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Nominees for 2014 Nigerian Insurance and Pension Award out

The Management of Inspenonline, Nigeria’s premier insurance and pension online media, has released the names of nominees for the 2014 Nigerian Insurance and Pension (Inspen) Award.

A statement by the Editor, Chuks Udo Okonta, said the yearly award which is in eight categories will be contested by underwriting firm, Pension Fund Administrators, broking firms and individuals who distinguished themselves in 2014.

He noted that nominees for the Insurance Man of the year category are, the Managing Director Mansard Insurance Plc, Mrs Yetunde Ilori; Managing Director Leadway Assurance Limited, Mr Oye Hassan-Odukale; Group Managing Director Custodian and Allied Plc, Mr Wole Oshin; Managing Director AIICO Plc,  Edwin Igbiti and former President Chartered Insurance Institute of Nigeria (CIIN)  Fatai Lawal.

Those for Insurance Company of the Year are, Mansard Insurance Plc; AIICO Plc; Leadway Assurance Limited; Custodian and Allied Plc; Mansard Insurance Plc; Royal Exchange Plc and Sovereign Trust Insurance Plc.

While those nominated for the Excellence Award are, Mr Oladipo Bailey; Professor Joe Irukwu and Mr Osaka Ogala.

He said institutions nominated for Best Professional Group Award are, Nigerian Insurers Association; Nigerian Council of Registered Insurance Brokers; Association of Registered Insurance Agents of Nigeria and Chartered Insurance Institute of Nigeria.

Companies for Corporate Brand Award are, according to him are, Sovereign Trust Insurance Plc; Leadway Assurance Limited and Mansard Insurance Plc.

Firms nominated for Corporate Social Responsibility (CSR) Award are, Royal Exchange Plc; Cornerstone Insurance Plc; Sovereign Trust Insurance Plc; Leadway Assurance Limited and Guinea Insurance Plc.

Firms nominated for the Pension Fund Administrator of the year are, Stanbic IBTC Pension Managers; AIICO Pension Managers; Leadway Pensure PFA Limited; Legacy Pensions Limited; FUG Pensions Limited and PAL Pensions Limited.

Firms nominated for Insurance Broking Company of the year are YOA Insurance Brokers; Leverage Insurance Brokers; Scib Insurance Brokers; Worldmark Insurance brokers; Glanvill Enthoven Insurance Brokers.

Okonta noted that special awards will also be presented to firms that were able to make a comeback having been hit by challenges and individuals that have distinguished themselves.  

He said voters are to vote for individuals and firms that have contributed immensely to the development of insurance and pension industry and by extension the nation, through mail to inspenonline@gmail.com or udochukwuyem@yahoo.com.

He said the awards presentation ceremony will hold by February 2015 in Lagos.

NICON to insure 125,000 Unity School pupils for N625m

To control the consequences of the Boko Haram insurgency and other forms of insecurity in the country, the Federal Government has hired NICON Insurance Plc to insure 125,000 secondary pupils in 104 Unity Schools across the country. Each pupil is expected to pay N5,000 premium per annum. This means that the company will be raking... (Read More)