There is disquiet among Insurance brokers under the umbrella of the Nigerian Council of Registered Insurance Brokers (NCRIB) over a plan to become a chartered body and be self-regulatory. The brokers fell into trouble with other trade associations after the only chartered professional body, the Chartered Insurance Institute of Nigeria (CIIN) kicked against their bid. They have since been in a dilemma on how to resolve the issue. Omobola Tolu-Kusimo reports
Insurance brokers under the umbrella body of the Nigerian Council of Registered Insurance Brokers (NCRIB) has, for a long time, pushed to self-regulate themselves instead of being regulated by the National Insurance Commission (NAICOM).
To pursue their dream, they are pushing for an Act in the National Assembly to create an Institute of Chartered Insurance Brokers, and transform it from its current status as a market association to a regulator.
The Bill, SB 507 was enrolled in the Senate on June 26 this year, and has passed through the second reading in the chamber. It is a private bill being sponsored by Senator Gbenga Kaka from Ogun State.
Section 2 of the Bill stipulates the duties of the institute when it is finally created, to include establishing and maintaining a central organisation for all insurance brokers, and enrolling persons as chartered insurance brokers.
Others are to “register insurance broking bodies, and secure in accordance with the provision of the bill, the establishment and maintenance of a register of chartered insurance brokers containing their 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 Bill to be registered, and the publication from time to time, of the lists of this persons.”
The institute when created will further seek “to encourage the dissemination of knowledge, education practical training and research into the profession, establish and maintain a library” and also arbitrate or settle dispute or questions between members and other parties.
“While it will discipline its erring members, the institute will also do such things from time to time, aimed at elevating the status of the chartered insurance brokers and the protection of their interests and procure their general efficiency and proper professional conduct,” the Bill provided.
But the crux of the matter and the question on the mind of most operators in the industry is whether the brokers are disciplined enough to self-regulate themselves. They wonder how safe is the insured premium with a broker, who is not under the regulation or an authority of a higher body?
Meanwhile, the educational arm of the industry, the Chartered Insurance Institute of Nigeria (CIIN) has requested that the Senate throws out the Bill as it is tantamount to running parallel to the industry regulator, NAICOM.
Before now, some of the brokers have always been at loggerheads with NAICOM over what they described as highhandedness of the regulator against them and have threatened to drag the Commission to court.
A hot battle could have ensued in 2010 between the duo as a result of some recommendations made to the government in the Insurance Act 2003, which is still under review at the National Assembly. The brokers were almost going to court over what they alleged as undermining their importance in the review of the Act, but it was settled before it degenerated.
A few years after, they continued to disagree with the Commission as it recently deregistered some 32 members over regulatory requirements. The Commission made itself clear that it will not relent at enforcing the law on erring brokers or underwriters who engage in various malpractices in the industry.
Commissioner for Insurance, Fola Daniel, said the recent withdrawal of 32 licenses of insurance brokers is as a result of their inability to meet the requirements of the Insurance Act 2003, which mandates brokers to renew their licences and render returns as at when due to the regulatory agency.
Daniel called on the brokers to abide by the industry’s laws or face the music as there is no longer hiding place for offenders.
He said the Commission will be very firm in enforcing compliance with laid down rules and regulations in order to instill discipline in the sector. He said: “It is high time we all stepped up our game and learnt to play by the rules. It is only by so doing that we can achieve real growth and development in the industry and make meaningful contribution to the economy.
“The Commission will continue to create the right environment for ethical behaviour and conversely, where we identify actions detrimental to the interest of the industry; we shall take corrective steps as part of our mandate. We shall continue to be responsible, responsive and when necessary, carry you along in the course of our actions and/or inactions; but in the overall interest of the industry, will regulate in accordance with international standards and best practises.”
CIIN President, Bola Temowo, in a letter to Senate President, Senator David Mark, titled: “Concerns of the Nigeria Insurance Industry about the Bill before the National Assembly for an Act to Provide for the Establishment of the Institute of Chartered Insurance Brokers,” said the CIIN is the body charged with the general duty of determining the standards of knowledge and skills to be attained by persons seeking to become registered members of the insurance profession in Nigeria.
The letter read: “The institute is empowered to carry out these duties by the provisions of the CIIN Decree No 22 of 1993. Among the principal objectives of the institute are to promote insurance education through conducting professional and certificate examinations for the purpose of registering eligible persons as insurance practitioners, encourage and assist insurance professionals to regularly update their knowledge in order to respond positively to changes in the business environment and meet the challenging needs of their clients; promote the general development of insurance practice by conducting, encouraging and assisting in the conduct of research into insurance and allied subjects with special emphasis on local practices, laws and conditions and also uphold and encourage members to adhere strictly to the observance of the industry codes of conduct and ethics for a healthy practice of the insurance profession.
“The Governing Council of the institute that makes policy decisions, which cover all spheres of the Institute’s operations, has representations from all the trade associations in the industry, including the NCRIB.
“The industry as represented at the Insurance Industry Consultative Council of the Chartered Insurance Institute of Nigeria, hereby states its concern about the bill. The ostensible goal of the sponsor of the Bill is to transform the NCRIB, an existing trade association to the status of a chartered professional body. This is inconsistent with practices in other known jurisdictions and will create conflict of laws. All the activities that are intended by the bill in this regard are currently being performed on behalf of the entire industry by the CIIN.
“The attention of your Excellency is drawn to the fact that if the bill is passed into law by the National Assembly it will be in conflict with the powers of NAICOM to register or license and regulate conduct of operators in the insurance sector. The quest is unconventional in the comity of global insurance professional bodies and will dismember the insurance sector of the nation’s financial system.
“It is capable of introducing double standards and engendering dissent and division in the insurance sector of the nation’s financial system. The industry cannot afford any Act seeking to further divide it and weaken the fabric of its much desired bonding. The entire industry is opposed to the Bill and considers therefore, the withdrawal of the Bill from being passed into law.
In another letter by Temowo to the NCRIB President, Ayodapo Shoderu, titled: “Expression of Disappointment at the Subsisting Bill before the National Assembly for an Act to provide for the establishment of the Institute of Chartered Insurance Brokers,” said the CIIN Governing Council is appalled by the Bill especially, on the intent and purpose to keep this from the knowledge of the Insurance Industry Consultative Council (IICC) of which NCRIB is an active member.
He said: “We note with displeasure, the intent of NCRIB in seeking what is tantamount to the dismemberment of the singular professional body, the CIIN, which by Decree 22 (Now Act) of 1993 was assigned the responsibility to determine the standard of skill and knowledge for insurance practitioners in Nigeria including insurance brokers.
“The quest by NCRIB for a second chartered body within the industry is not only in bad taste, but also unconventional. NCRIB as an existing trade association in Nigeria is already providing the necessary and adequate bonding for practicing insurance brokers. This does not in any way necessitate the charter status as the CIIN already provides this coverage for all insurance professionals and non-professional members.
“It is Council’s conviction that the industry Consultative Council provides the platform for the ventilation of ideas for possible deliberation. Any action in negation of the objectives of the IICC will not augur well for the much needed bonding of all arms of the industry.”
The CIIN, therefore, asks the NCRIB President to consider the withdrawal of the Bill and also a response to the letter before the next meeting of the IICC, which held on November 19.
The Nation, however, gathered that at the IICC meeting last week, it was resolved that the NCRIB withdraws the Bill from the National Assembly with immediate effect.
A senior official in the industry, who spoke on condition of anonymity, said the NCRIB is not capable enough to discipline its members. He noted that the NCRIB must remain under the regulation of NAICOM to maintain law and order in the industry. He also urged the National Assembly to throw out the bill.
The NCRIB President, Shoderu, in a telephone interview with The Nation, could not confirm or deny whether the Bill has been withdrawn or not. He said he would brief the press at the appropriate time.
A past president of the NCRIB, Laide Osijo, said the association is still debating the Bill, to avoid crisis in the industry. “We are still discussing it because we don’t want controversy with anybody in the industry. The past presidents have intervened and we are deliberating,” he said.
