Niger Insurance Plc and Standard Alliance Insurance Plc have dragged NAICOM to court over revocation of their operating licenses.
While Standard Alliance had initially appeared to have accepted its fate, Niger head to court immediately the commission withdrew its license and the former followed suit thereafter.
Information gathered revealed that the companies are claiming that their inability to pay claims and other irregularities claimed by the commission is not enough for their licenses to be withdrawn.
NAICOM revoked certificates of registration of Niger Insurance and Standard Alliance Insurance Plc, effective from June 21, 2022 for unethical conduct.
The decision, which was contained in a statement signed by the commission, automatically meant that both companies can no longer provide insurance policies and cover to the public.
A senior executive in the insurance industry said the industry is surprised that the two troubled companies could go to court.
He said the companies are owing billions in claims and has been involved in a lot of unethical conduct before the commission shut it down.
He lamented that the commission waited for too long before shutting down the companies because they have long been giving the industry bad reputation.
He said: “These two companies are the major bad eggs that we have been having problems with in the industry.
“They are owing fellow insurance companies, brokers and above all, policyholders. We have been calling on the commission to stop them from doing business for a while only for it to be done in June. Surprisingly, the companies have gone to court”.
But another senior officer believes that the revocations of Niger and Standard Alliance were selective, noting that there are still bad eggs in the industry that need to be wielded out.
Meanwhile, NAICOM has threatened to withdraw the licenses of more erring companies in a bid to sanitise the industry.
The Chairman, Governing Board of NAICOM, Dr Abubakar Sani, said the agency was desirous of protecting policyholders and instilling discipline in the industry.
He said: “We have to sanitise the institutions and we will not allow weak companies to continue in order to protect policyholders. This is important so that at the end of the day, nobody will accuse us of having weak regulations. We are out to really protect policyholders,” he said.
On the allegation that the revocations of Niger Insurance and Standard Alliance were selective, Sani noted that NAICOM followed due process before withdrawing their licenses.
“Revocation of licenses is not something that is done in a day because the Insurance Act of 1997 prescribes investigation and inspection, and they are statutory. If a company starts failing, does not meet the requirements or the management control is not there, the license can be withdrawn.
“Under the process, you would be informed. And when you fail to meet up with your obligations, cannot adequately run as a company and cannot meet up with obligations, the regulator will use a hammer on you. Even then, by law, you are allowed to appeal to the minister who would decide whether the due process was followed. So, it is never about bias, and more companies that do not meet up will also face sanctions”, he added