The Nation Newspaper

Category: Insurance

  • WAICA brokers forum elects chairman

    WAICA brokers forum elects chairman

    The West African Insurance Companies Association (WAICA) has named a new Chairman for its Brokers Forum. He is Mr Rotimi Edu.

    The spokesman of the Nigerian Council of Registered Insurance Brokers, Mr Tope Adaramola, said Edu was elected at the yearly confab of the West African regional body in Sierra Leone.

    He said with the election, Edu, who is a Governing Board member of the NCRIB, insurance brokers would synergise their efforts across the West Africa sub-region.

    Mr Edu said one part of his mandate was to ensure that insurance brokers operating in the West Africa sub-region collaborate more effectively for business and professional advancement.

    He stressed that the forum would work with other professionals in the sub-region to accelerate their contributions to global economic development.

    NCRIB President, Laide Osijo, said the election has opened a new vista for insurance brokers in the regional body and served as a mark of confidence reposed in insurance brokers.

    She promised the council’s support for the new chair and his team to ensure a successfull tenure.

  • Lack of substantive NHIS head cripples health benefits

    The delay by the Federal Government to appoint a substantive head for the National Health Insurance Scheme (NHIS) is stalling some major activities in the scheme and hindering Nigerians from reaping the benefits of the health policy.

    The NHIS has had an Acting Executive Secretary in Mr Abdulrahman Sambo for about a year following the exit of Mr Muhammad Sambo.

    Chairman, Association of General and Private Medical Practitioners of Nigeria (AGPMPN), Lagos branch, Dr. Adeyeye Arigbabuwo, disclosed this in an interview with The Nation.

    He said the NHIS has an acting executive secretary who cannot perform much because he is in acting capacity.

    He said for sometime, things had been at a standstill, adding that the workers were waiting for the Federal Government to appoint a replacement.

    According to him, the acting executive secretary may wish to do more to bring effective health coverage to Nigerians and tackle problems associated with the scheme, he is restricted because he does not have all the powers to do so.

    “At present, the NHIS is yet to have an executive secretary. The person there is working in acting capacity. There are very few things he can do if he is in acting capacity. The law will not permit him to do a lot of things and when that is on ground and you take your complaints and issues to him, there is limitations to what he can do. Even to start implementing things like budgetary allocations may not be easy for him to do,” he said.

    He noted that the National Health Bill which at the moment is going through its second reading at the National Assembly is also a major factor in solving the many problems of the scheme.

    Arigbabuwo, who is also the Deputy National President, Healthcare Providers association of Nigeria (HCPAN), said there are germane issues in health insurance, which bother on universal coverage, how people get subscribed to health insurance and health care financing.

    He said though the passing of the Health Bill, is being delayed, it is better for the bill to come rather late and errors are taken care of.

    “What is important is the quality, content, acceptability of the bill and the effect of the bill on the citizenry. The bill is with the National Assembly and they are looking at few things that have to do with the NHIS,” he said.

  • NCRIB to operators: Curb premium flight

    President, Nigerian Council of Registered Insurance Brokers (NCRIB), ‘Laide Osijo, has tasked operators in the industry to work towards curbing the menace of premium flight.

    She lamented that the performance of the industry has impacted marginally on the economy over the years, adding that there was need for operators to make concerted efforts toward reversing of the trend through a radical approach.

    Osijo, who made this call in Lagos, also emphasised the need for stakeholders improve the sector by being active.

    She said: “The future, they say belongs to those who prepare for it. For us to take our rightful position in the comity of nations and play the expected roles as Africa’s leader that we ought to be, we need to wake up from our slumber and start doing things differently and rightly.

    “It should be affirmed that the roles of ithe nsurance industry are very crucial to the attainment of strategic objectives of FSS 20:2020. Let us have a paradigm shift in the way we do business and start being more creative, professional and adhere strictly to ethics of the profession.”

    The NCRIB chief also stressed the need for cordial relationship, collaboration and cooperation between the regulators and other stakeholders for growth to be achieved.

    “NCRIB believes in the nation’s vision, and is committed towards the attainment of the strategic objectives of FSS 20:2020. Therefore, to contribute to the repositioning of the industry, we continued cooperation and collaboration with the National Insurance Commission (NAICOM), Chartered Insurance Institute of Nigeria (CIIN), Nigeria Insurers Association (NIA), Institute of Loss Adjusters of Nigeria (ILAN) and other stakeholders in corporate governance enforcement.

    “We are also sensitising the public on the benefits of using registered insurance brokers for insurance placement,” she said.

    She added that NCRIB was working towards protection of the insuring public, ensuring that brokers are more professional in the discharge of their services to the insuring public and encouraging collaboration with bodies of interest in the enforcement of the compulsory insurances to deepen the insurance penetration as it is being promoted by NAICOM.

    Osijo added that the council encourages the practitioners on the need for adequate capitalisation for global competitiveness. She urged them to explore options of mergers while promoting innovations by the operators to provide covers and policies for the new exposures emanating from the transformational processes.

    She said other actions by the council include, “Improve on training and human capital development for practitioners, Increase on insurance awareness drive to the insuring public, especially towards the promotion of micro insurance, since insurance thrives on large number.”

    Osijo urged the present generation to stand up to be counted by being creative, thinking outside the box, and be ready to square up to the emerging risks emanating from the various sectors of the economy as a result of the transformation strategy in process.

    “We can no longer afford to be docile or be spectators and at the same time be expecting development and/or curb premium flight if we don’t take charge of our destiny. All we need to do is to change our mindset, and our attitude would change, hence our industry would be vibrant again with the resultant return of the glory of our beloved nation,” she said.

  • Fed Govt workers yet to get group life cover

    Fed Govt workers yet to get group life cover

    • Govt owes 2011, 2012 premium

    Federal Government workers are yet to be covered under the Group Life Insurance Scheme for this year as required by the Pension Reform Act 2004.

    The Act states in Section 9(3) that employers shall maintain life insurance policy in favour of their employes for “a minimum of three times the annual total emolument of the employee”.

    This implies that dependents of deceased government workers in Ministries, Departments and Agencies (MDAs), such as the Nigeria Police Force (NPF), Central Bank of Nigeria (CBN), Economic and Financial Crimes Commission (EFCC), Federal Ministry of Education, and Federal Ministry of Justice, Federal Ministry of Power, among others, who die in active service are not eligible to get compensation.

    This is in line with the enforcement of the ‘No premium, No cover policy’ directive of the National Insurance Commission (NAICOM).

    This development, sources said, might have forced the Nigeria Police that have in recent times been recording heavy casualties as a result of security challenges in the country, to opt out of the scheme.

    Although the Head of the Civil Service of the Federation is yet to request for life insurance cover for the workers, the Federal Government owes premiums of N3billion and N4billion for Group Life purchased in 2011 and 2012.

    Last year, the Federal Government had directed the former Head of Service of the Federation, Isa Bello Sali, to pay outstanding premiums for last year’s group life assurance scheme. But up till today, the money has not been paid.

    Stating reasons the premiums have not been paid, the new Head of the Civil Service of the Federation, Bukar Aji, said: “What caused the six-month delay in the payment of workers’ insurance policy premium for the 2012 financial year was because my office could not secure on time the certification from the Due Process Office, which was required for the payment.”

    He explained that the process of payment of the group life insurance for the federal workers had changed, adding that it is being handled by the Office of the Accountant-General of the Federation.

    According to him, the Federal Executive Council (FEC) had approved payment of insurance premium through the office of the AGF.

    Aji said the Office of the Head of Service had forwarded a letter to that effect to President Goodluck Jonathan for approval and was asked to revert to the earlier approval of FEC for the Office of the AGF to pay.

    He, however, said the government was ready to pay the outstanding N7 billion premium for 2011 and 2012.

    According to him, the government prioritised the welfare of its employees, adding that the insurance cover would serve as an encouragement for families of deceased workers.

    He said the government had to manage available resources in the light of competing demands.

    Speaking on the provision for this year’s life insurance, Aji said: “There will be cover for the workers this year. What we have in the appropriation bill for 2013 insurance cover is N11billion. The total outstanding premium for 2011 and 2012 is about N7billion; that is, N4billion for 2012 and N3billion for N2011.

    “The way it is done is that the Ministry of Finance gives the instruction to Director-General (DG) of the Budget Office and the DG sends it to the Accountant-General’s office; the Accountant-General releases the funds to the HOS and the HOS pays into the respective insurers’ bank accounts and all that.

    ”So, it is just a question of electronically instructing the Office of the Accountant-General to pay so that it can reduce the time deployed to process it. But whether the full premium for this year would be paid or not depended on the level of revenue generation and inflow to the Federal Government.”

    President Jonathan, while swearing in Aji at the Presidential Villa, Abuja, noted that the civil service was central to the realisation of his administration’s Transformation Agenda.

    He charged him to work towards curtailing corruption and enhancing discipline in the service.

    He said his government and Nigerians expect Aji to focus on those areas that are most important to the people.

    Octogenarian and industrial giant, Deacon Gamaliel Onosode told The Nation in Lagos recently that the payment of a premium is a contractual obligation.

    His words: “When you enter into a contract, you must discharge your responsibility under that contract to an individual or the public you had a contract with. It does not matter what the contract is but it is designed to deliver some hope to the individual or the public as the case may be. So, if you don’t keep up to the contract terms, then it means you are not being fair to those whom you have entered into the contract with.

    ”The insurance of workers is a matter of contract. If you choose not to go the route of contract but you want to bear the cost yourself, that is your choice. So, if the Federal Government wants to charge the cost of making good the loss or damage a worker experiences and wants to reflect that in his budget rather than the premium to pay to an insurer, those are two choices you must choose from.”

    The Director-General, Nigeria Insurers Association, Mr Sunday Thomas, said the government needs to adjust to the dispensation.

    “This is the first year of deliberate effort to enforce no premium, no cover by NAICOM and all we can hope for is that it should get better in future,” he said.

    The Managing Director, Scib Insurance Brokers, Mr Shola Tinubu, said the law has made it the responsibility of the employer to ensure that his employees are insured for stipulated benefit.

    He noted that if for any reason, the employer does not insure his workers, such employer has contravened the law.

    “But what do we do when government is concerned as the employer in this case and when it had ample notice?

    “The commissioner for insurance had done publicity about ‘no premium no cover’, which is not a new rule. NAICOM did not reinvent the rules, it was the law that was already in existence that they are implementing. NAICOM also set up a forum where its officials discussed with government institutions and desk officers. They told them cover was going to be strictly no premium, no cover in advance and things that needed to be done.”

    According to him, at the end, the private sector responded appropriately because they do not think they are above the law and they know they need to comply.

    “But what can we do if the government institutions refuse to comply with the law also passed by an arm of government?

    “There is really nothing we can do but they are still culpable. They are still responsible because people die in service and they must ensure benefits are paid.

    “As an industry and as a people, we should understand that if we watch a general problem continue and fester because it is not affecting us at that particular point in time, it may become a big problem to us in the future hence the need to address the challenge now,” he said.

     

  • NAICOM revokes Fortune Assurance’s licence

    • Advises policy holders on Bendel Insurance 

    The National Insurance Commission (NAICOM) has revoked the certificate of registration of Fortune Assurance Company Limited.

    It said the revocation of the licence of the firm took effect from June 14, warning members of the public against dealing in any of the company’s properties without recourse to the commission

    The Commissioner for Insurance, Mr Fola Daniel, said it has also started the process of releasing money received by the company from Suffolk Petroluem Services Limited as deposit for shares during the failed recapitalisation of the company in 2007. It added that correspondence relating to Fortune Assurance Limited (in-liquidation) be addressed to the commissioner.

    The commission also advised insured with claims against Bendel Insurance Limited and other stakeholders to contact the receiver and liquidator of the company.

    NAICOM cancelled the certificate of registration of the company.

    It stated that Felix Imagbe Oboh Esq. of Oboh & Associates was appointed as the Receiver/Liquidator to wind up the affairs of the company.

  • Pension operators not running down life annuity, says chair

    Pension operators not running down life annuity, says chair

    Chairman of Pension Operators in Nigeria (PeNop), Mr. Dave Uduanu, has said it is the choice of would be retirees to opt for programme withdrawal or life annuity products.

    Before now, insurers had alleged that some Pension Fund Administrators (PFAs) in their desperation to continue to manage Retirement Savings Account (RSA) holders’ pension savings even in retirement run down life annuity products and their providers.

    Uduanu, who spoke with journalists said PenCom has done its bit in working with insurance companies and the regulator. He said that insurers and PFAs were invited to a seminar where the two products were extensively discussed.

    At the end of the day, it is the choice of would be retirees whether to go with programme withdrawal or annuity.

    He said: “It is not the job of PFAs to sell annuity. We do not sell annuity. We give our contributors the option to choose programme withdrawal or annuity. Therefore we cannot answer why insurers are not selling. It is just that people decide to choose programme withdrawal.

    “As we said at the workshop, because the scheme is just seven years, programme withdrawal may take the lead, and after a while annuity will catch up.

    “There are issues we also raised about annuity with the National Insurance Commission (NIACOM), which will address them.

    “It is not the fault of the PFAs that annuity is not taken. I know that there is high demand for annuity recently and it will soon pick up.”

  • CIIN to enhance national transformation

    The Chartered Insurance Institute of Nigeria (CIIN) has resolved to contribute to ongoing national transformation process as it engenders far reaching implications for the insurance sector, especially in gaping business opportunities and the need to design policy packages that could take care of the emerging risk exposures.

    The Director-General of the institute, Mr Adegboyega Adepegba, has said.

    He said this was the resolution of insurance practitioners following deliberations on issues thrown up by the institute’s conference in Lagos where an eight-point communiqué was issued.

    He said members also acknowledged the fact that the CIIN needs to explore platforms for bringing the professionals in governance into the fold with a view to tapping from their exposures in the resolution of some key issues burdening the business and practice of risk bearing.

    He added that the industry is facing serious challenges from the less than optimal financial literacy in the country and to this effect, the industry needs to put the necessary machinery in place for up-scaling its on-going awareness creation.

    The insurers, he said, acknowledged that modern insurance is highly technology-driven, necessitating the need for insurance institutions to deploy cutting-edge technology in order to square up with the growing trends engendered by the national transformation process across all sectors of the economy.

    Also, he said the industry should promote fruitful partnership with other relevant bodies and agencies in order to create beneficial synergies in business promotion and should take a sterner look at the issue of corporate and individual practitioners’ market discipline by putting in place a disciplinary system that is compatible.

    “Operators need to take human capital development more seriously with a view to entrenching an enduring succession plan while it stands in the vanguard of promoting medium and small scale enterprises in line with the transformation agenda of the Federal Government,” said Adepegba.

  • Shareholders inject N1.4b into Linkage Assurance

    Shareholders inject N1.4b into Linkage Assurance

    Shareholders have injected N1.4 billion into Linkage Assurance Ltd, following its botched merger with Cornerstone Insurance Plc.

    Notwithstanding, the fresh fund, the underwriting firm said it still hopes to find a suitable partner to merge with in the future.

    Sequel to this, shareholders of the two companies had disagreed on merger arrangement of 30:70 which was in favour of Cornerstone.

    During the 2012 Annual General Meeting (AGM) of the Linkage Assurance in Lagos, shareholders asked the company’s board to discontinue the merger discussions, insisting that if the company intends to merge with another firm, it should not be Cornerstone.

    Speaking at the AGM, a shareholder, Mr. Nona Awo threatened that shareholders would not allow the company’s board to rail-road them into a merger arrangement of 30:70 in favour of Cornerstone. He added that minority shareholders would definitely move against it.

    In the same vein, President of the Nigerian Shareholders Solidarity Association, Mr Timothy Adesiyan, said: “We are not against merger of the company if the need arises but definitely, we will not merge with a Cornerstone.”

    However, in a new development, Managing Director of Linkage, Mr Gus Wiggle, in an interview with The Nation, said one of its shareholders increased its holdings from 17 per cent to about 53 per cent by injecting about 1.4billion into the company.

    According to him, the next stage for the company is to grow organically while management shops for people it can partner with.

    Wiggle noted that the industry is fragmented at the moment and as such, there is need for more mergers and acquisition, citing the recent merger between Custodian and Allied Insurance and Crusader Insurance as setting the pace for others to follow.

    “Until we are able to streamline our numbers and are able to work in a smaller number which is what the market really wants, we may not have companies in the industry that can compete favourably in the global sphere”, he noted.

    Explaining why the merger with Cornerstone did not work, Wiggle said the numbers which is the reason for the merger did not add up.

    “The indices of what propelled the merger in the first place suddenly did not add up and we just felt there was no reason for it to continue.

    “Also the shareholders have the final say and because they believe their interest was not been considered, we had to respect their view by ending the merger. Presently we are building the company,” he said.

  • Insurers fret over life annuity hijack

    Insurance operators are becoming more agitated over fears that Pension Fund Operators (PFOs) will grab another major chunk of their business – the life annuity business.

    To avert this, they have begun lobbying at the National Assembly on the proposed Pension Reform Act of 2013, a replacement for the Pension Reform Act 2004, which, they believe, will determine their fate on the issue of having to leave life annuity funds with PFAs.

    At a forum in Lagos, insurers expressed fears as they deliberated on how to tackle the problem.

    On their mind is that another major cut is rearing its head in their business going by previous businesses that have been taken over from them by other sectors.

    In 1999, they lost health insurance; in 2004, they lost pension and lost the control of Workmen’s Compensation in 2010.

    Going by this, the industry has lost three critical classes of insurance business in 10 years. The PFAs have become a major threat to them.

    They alleged that some PFAs in their desperation to continue to manage Retirement Savings Account (RSA) holders’ pension savings run down life annuity products and their providers, an allegation the PFOs have debunked.

    Section 4 of the Pension Reform Act provides that upon retirement an employee is entitled to two options, you either take the programme withdrawal, which allows your Pension Fund Administrator to continue to manage your fund until you exit the system or you take an annuity.

    Life annuity, as prescribed by the pension law, is a contract between the annuitant and a life insurer for the payment of agreed amounts of money at agreed intervals to the annuitant.

    The annuitant transfers part or all of the balance in his RSA to the life insurer as consideration for him to receive given amounts over a given period of time at agreed intervals.

    Programme Withdrawal pays pension over an expected life span and is sold by PFOs

    While annuity pays pension for life and can be purchased from a life insurance company licensed by the National Insurance Commission (NAICOM), with monthly or quarterly payments making it a regular income.

    It is noteworthy that whereas the PFOs have started programmed withdrawal since 2005, the insurance companies only started annuity programme in 2010.

    Also, where a retiree chooses life annuity, he negotiates with the life insurer based on his Retirement Savings Account balance projected to the date of retirement and gets an Annuity Provisional Agreement from the insurer, which he submits to his Pension Fund Administration (PFA).

    Within seven days of receiving retiree’s application, the PFA seeks approval from PenCom to transfer the agreed premium to the insurer, attaching a copy of the provisional agreement.  PenCom is required to forward copies of approval to PFA/PFC and NAICOM and within seven days of receiving approval, PFA must instruct PFC to a issue cheque for the premium in favour of the insurance company.

    Upon receiving the cheque from PFC, the insurer must within seven days notify the proposed annuitant of such cheque and the latter and his insurer jointly must execute an annuity contract within 21 days from the date of receiving payment. The insurer then forwards schedule of policies written to NAICOM not later than 30 days of the execution.

    The balance in his RSA having been transferred to the life assurer, the retirees gets monthly annuity/pension from the insurance company.

    Most importantly, life annuity payment under contributory pension is guaranteed for a minimum of 10 years in case of death, but the retiree is free to go for a higher guaranteed period with monthly annuity not less than half of his monthly emoluments at retirement.

    In 2006, the NAICOM and the National Pension Commission (PenCom) collaborated on regulation of Annuity under Section 4.1 (B) of the PRA 2004 for giving effect to the provisions of the Pension Reform Act (PRA) 2004 as it relates to Life Annuity

    It states: “A holder of retirement savings upon retirement shall utilise the balance standing to the credit of his retirement savings account for annuity for life,, purchased from a life insurance company licensed by NAICOM with monthly or quarterly payments.”

    Former President of the Chartered Insurance Institute of Nigeria (CIIN), Mr Sunny Adeda, appealed to insurance practitioners out of the fear of losing out on the pension reform act to take marketing of annuity to the people very seriously.

    Adeda made the call at a conference in Lagos.

    He said insurance companies are not marketing annuity as they ought to and the pension operators are taking advantage of the fact that they know when the retirees are retiring and offer them better terms before insurers even know they have retired.

    “There are few companies that are taking the annuity business seriously and there is the need for an interrvention. A lot of people do not know the difference between programme withdrawal and annuity products.

    Adeda noted that a few companies are making money from the annuity scheme, but there’s the need for others to also take a advantage of it.

    “What we need to do is to intensively mull a lot of campaigns. As it is, we are not doing anything. And this is why PFAs can say there’s no need for the money to go to the insurance company. They want the money to remain with them. We need to rise as an industry and address this problem.

    “Today, they are processing the pension reform act for amendment and we need to put ourselves together to lobby because if we don’t make a concerted deliberate effort, we will lose the business. And when we lose it, we start crying. That was how we lost the Workmen Compensation. It left us before we started crying,” he said.

    We must have people who are looking at this issue daily so that as the process is going, its being monitored to ensure that our interest is not jeopardised.

    Director-General, Nigeria Insurers Association (NIA), Mr Thomas Olorunda, assured his colleagues that the Pension Reform Act 2004 is being amended.

    He said: “We got wind of it and we have made our submission and we are following up on it.

    “One of the things we address in our submission is the issue of having to leave life annuity funds with custodians.

    “In our submission, we made it very clear that life annuity is different from programme withdrawal because how you deal with them, how you manage the funds relating to them are practically different,” he said.

    He noted that insurers must have influence and flexibility to manage life annuity funds without necessarily having to warehouse it with the pension custodians.

    The DG further said NIA has designed a publicity programme for annuity in English and Pidgin, which is coming on the radio in the six geo-political region of the country before the end of the month.

    He noted that the programme will run for at least three months and the association believes it will educate the people on why they should choose annuity.

    He, however, called on underwriters and brokers to join in the sensitisation.

    “I enjoin the Nigeria Council of Registered Insurers Brokers (NCRIB), who are buoyant to do something in publicity because we need to pump it into the mind of the people.”

  • Lost adjusters to Govt: Build more forensic labs

    The President, Institute of Loss Adjusters of Nigeria (ILAN), Mr Lebi Omoboyowa, has called on the Federal Government to build more forensic laboratories in the country.

    According to him, a situation where only one science laboratory exists in Nigeria affects the quality of work of forensic experts in arriving at accurate judgments following investigations.

    Omoboyowa, who spoke in Lagos, said there is only one forensic laboratory in the country and it is the Science Laboratory at Oshodi, Lagos.

    He noted that in advanced countries, there are other forensic laboratories, such as accounting, engineering and others.

    He said apart from their own professional knowhow, they also consult the forensic experts.

    On the promotion of professionalism among loss adjusters, Omoboyowa said ILAN members have begun to improve themselves by going for local and international trainings while they also network with their professional colleague.

    He noted that the idea of holding meetings in the underwriters’ office has gone.

    “Adjusters must have their own office and necessary equipment so that at the end, an accurate result is produced without time being wasted.

    “I believe that we will surmount all the challenges before us and boost the image of this industry,” he said.

    He added: “The objectives of the institute is to establish and sustain a professional body of practising loss adjusters in Nigeria and engage in activities that will ensure the general welfare and well-being of insurance loss adjusters and to take necessary actions for the advancement of education in the field of loss adjusting in Nigeria.

    “It is being pursued by establishing and maintaining institutions, libraries, schools, and recreation centres for the succour, assistance or education of its members, and the public in Nigeria in loss adjusting.

    “It also includes applying the funds of the institute in the purchase of proprietary or other interests and the establishment of projects the proceeds of which shall be appropriated wholly and entirely for charitable purposes and public wellbeing of Loss Adjusters in Nigeria.”

    He said as part of their code of conduct, a loss adjuster must not accept nor give secret commission in connection with his profession, must not accept any part of the profits or the professional work of a solicitor or any commission or bonus thereon, nor shall he be actively engaged in any firm of insurance broking, insurance agency or underwriting; shall not directly or indirectly accept from an auctioneer, broker or agent, any part or proportion of any remuneration commission or bonus on the charges payable to such auctioneer, broker or agent.

    “A loss adjuster must not participate in any benefit from the sale of salvage, the loss on which he will adjust or has adjusted and a loss adjuster who has been instructed by one insurer and ascertains that any other insurers also cover other interests in the same loss, must not make contact with the other Insurers with a view to seeking their instructions to act in connection with the loss.”