The Nation Newspaper

Category: Insurance

  • Brokers decry NAICOM’s registration fee

    Brokers in the industry have condemned the increase in brokers licence processing fees from N1million to N2.5million by the National Insurance Commission (NAICOM).

    The brokers, who spoke on condition of anonymity, also accused the commission of frustrating them out of business.

    One of the brokers said insurance brokerage is one area that enables chartered insurance practitioners to practice, but with the new fee, it has become difficult for prospective brokers to practice in the field they choose to.

    He said: “The new licensing fee can be seen as a barrier to anybody willing to practise as a broker. This kind of fees does not abound in other professions like accountancy, law, estate surveyors, quantity surveying among others.

    “If the regulator wants to deepen insurance penetration and increase awareness, then we need skilled and knowledgeable people and the new fees does not encourage this.”

    A female broker, who also spoke on condition of anonymity, said this kind of regulation can be frustrating to people wishing to take part in the profession.

    She noted that though the new fees do not directly affect brokers who have been practising, it affects professionals in the industry.

    But Assistant Director, Corporate affairs, NAICOM, Mr. Rasaaq Salami, said the new fees which took effect from January 1, this year only affects new brokers.

    The commission, as part of efforts aimed at effective service delivery, directed that registration of new brokers by the Commission would henceforth be done in two batches yearly.

    The commission said: “Consequently, operating licences to successful applicants in the first batch would be issued on June 31 of each year, while the second batch shall be issued on December 31 of the same year.

    “For applications falling due in the first batch, all relevant documents are expected to reach the commission not later than March 31, while those for the second batch should have been received in the Commission on or before September 30 for processing.

    ‘’Applications and support documents received after March 31 or September 30, shall be treated as part of the next batches for consideration in the succeeding second half of the year.’’

     

  • ‘Industry strong to combat terrorism financing, money laundering’

    ‘Industry strong to combat terrorism financing, money laundering’

    The insurance industry has enhanced the country’s fight against terrorism financing and anti-money laundering because of the enforcement plan of the Nigerian Insurance Commission (NAICOM), The Nation has learnt.

    Earlier, the sector was described as one of the weakest link in the financial sector and lagging behind.

    But Managing Director, Forensic and Compliance Institute, Mr Nathaniel Cole, said the level of compliance in the sector has increased.

    Cole, who is a consultant for NAICOM and some insurance companies on Anti-Money Laundering and Combating Financial Terrorism (AML/CFT), said though the industry started the implementation after the banking industry, it has since improved.

    He, however, noted that there is still need for more improvement.

    On how the regulator has implemented the AML/CFT, Assistant Director (Inspectorate), NAICOM, Dr. Sam Onyeka, said the organisation has partnered with the Nigerian Financial Intelligence Unit to ensure full compliance with anti-money laundering laws in the insurance sector.

    Onyeka said: “The idea is to sensitise the insurance companies on how to migrate to the new platform for reporting money laundering issues to the NFIU.

    “Basically, we have three types of reports. We report on suspicious transactions, cash/currency transaction report and foreign transaction report. Before now, the reporting system had not been uniform because while some firms were using IT platforms, others were using the hard copy versions for their reports. What the commission plans to do now, is to synchronise the system so that every firm can be on the same platform”.

    To make this possible, he said the NFIU had to issue a guideline.

    This guideline explains how to use the IT platform established for this purpose. Our expectation is that companies should be able to report using the new IT platform by NFIU and it will also improve the level of compliance,” Onyeka said.

    The Director, NFIU, Juliet Ibekaku, said the responsibility to take specific and timely action to prevent the financial system from reputation and legal risks rested mainly with the insurance companies in the first instance because of the nature of services and products that it offered to customers and because of the type of clientele it served.

    “Some of the responsibilities of the insurance companies include identification of suspicious transactions and submission of all suspicious transactions to the NFIU in a prompt and timely manner in order to aid the combat of financial crimes, control the laundering of illicit money and prevent the use of the financial systems by terrorists,” she noted.

  • ‘No premium, no cover policy boosts insurance’

    ‘No premium, no cover policy boosts insurance’

    Liquidity has improved in the industry following the enforcement of ‘no premium, no cover’ policy by the regulator, the National Insurance Commission (NAICOM).

    Managing Director of Sovereign Trust Insurance Plc (STI), Mr Wale Onaolapo, told The Nation that he was excited over the enforcement of the policy.

    He said: “STI is reaping bountifully from the enforcement as business is moving and customers are warming up to the development.

    “Business is moving, liquidity has improved, renewals are being done and the development is positive.”

    Chairman, Ibadan Chapter, Chartered Insurance Institute of Nigeria, Mr Gbenga Falade, said the policy has been enforced such that no insurer was ready to offer cover on credit.

    Falade added that the financial report of the industry could be accurate as premiums are collected upfront.

    “The industry is very serious about the no premium, no cover policy. No insurer is ready to pay heavy sanctions imposed by NAICOM. Brokers have also come to terms with the fact that the policy has come to stay,” he said.

    From January 1, this year, NAICOM said it was ready to enforce the law, which states that all insurance services shall be provided on ‘no premium no cover’ basis.

    After that date, any insurer, who grants cover without receiving premium or premium receipt notification from the relevant insurance broker, shall be liable to a fine of N50, 000 on each cover so granted.

    “All insurance covers shall be provided on ‘no premium no cover’ basis. Consequently, only cover for which payment has being received, directly by the underwriter or indirectly through duly licensed insurance brokers, shall be recognisable as income in the books of the insurer.

    “Cover may be granted on annual or time-on-risk basis. Irrespective of the period of insurance, underwriters should ensure that at any point in time, they have received directly or indirectly, through the insurance broker, the premium for the cover being granted.”

     

  • ‘Underwriters yet to tap into local content’

    The insurance industry is yet to take advantage of the benefits of the local content policy due to low human capacity, Dr. Wole Adetimehin, President Chartered Insurance Institute of Nigeria (CIIN), has said.

    Adetimehin told reporters in Lagos that the situation had remained a challenge to the industry.

    According to him, nobody can fault the underlining reason of the local content policy initiative, which cuts across the sectors of the economy, noting that in appraising the benefits so derived from the sector, stakeholders were having the fears as to what report they would give.

    He said from all facts available, they were yet to start. Though there had been some participation, it was still far from what was expected, he added.

    He said: “I would say this has remained a recurring challenge facing our industry, which is more prominent with the underwriters. Nobody can fault the underlining reason of the local content policy initiative and it is meant to cut across all the sectors of the economy. But in appraising the benefits so derived from the insurance sector, we are all having the fears as to what conclusion or report card we would give at this time. This is because from all facts available in real and concrete terms, we are yet to begin.”

    Adetimehin said there was need for the industry to address the challenge in a more pragmatically by re-strategising and one of such ways is for stakeholders to come together and evolve solutions.

    He noted that the idea of everybody going about it alone could not resolve the challenge, adding that at the institute’s level, the challenge is to promote training and curricular that would open or widen the minds of practitioners to what to do.

    He further said though the capital base of companies have grown beyond imaginable scope, a lot more is expected.

    “You do not underwrite or shoulder risks with your capital. You can only provide infrastructure that would propel you to underwrite. What needed to be developed is the capacity to absolve. Stakeholders should be advised to shun independent approach to doing things and align more effectively to the fundamentals of insurance practice globally, which is pooling and sharing of risks.”

    “The experience has been fairly good in the oil and gas, but if stakeholders can come together under pool formations at many levels, capacity would grow. We would even go beyond the shore of Nigeria to absolve risks,” he said.

    The National Insurance Commission (NAICOM) to reduce capital flight in the country and enhance the participation of local insurers in the oil and gas business, released guidelines to regulate the operations of the business in December 2010.

    The rules stated that no person or organisation “shall transact an insurance or reinsurance business with a foreign insurer or reinsurer in respect of any life, asset, interest or other properties in Nigeria, classified as domestic insurance, unless with a company registered under the Insurance Act 2003.”

  • ‘MDRI is achievable’

    DESPITE the challenges facing the economy, the N1 trillion premium target of the Market Development and Restructuring Initiative (MDRI) project is still achievable, the Consultant to the National Insurance Commission (NAICOM) on MDRI, Mr Yemi Soladoye, has said.

    The project is expected to boost industry capacity, market efficiency and consumer protection in the insurance market.

    Soladoye told The Nation that the initiative would grow the market and move the industry’s gross premium from N164 billion to NI trillion.

    He said the insurance firmes were making sales in the five compulsory insurance.

    However, he said, he does not believe the economic problem in the country is thwarting the insurance companies’ efforts in achieving the desired results or the sales of compulsory insurance policies, adding that companies such as Mutual Benefit, Leadway Assurance, were making good sales.

    He said: “I disagree that the economic condition can frustrate the efforts of the underwriters in selling these products because, if this is the case, it will affect the economy. Whether the economy is good or not is debatable. Some people and institutions are still making a lot of money from the system.”

    He noted that the underwriters only need to be persistent in insurance marketing for them to surpass the target

    “I know that some of the underwriters are making efforts in ensuring the set goals in the industry are achieved because they call me for clarifications. Based on my conviction, I am sure that they will meet the target.

    “All they need to know is that the businesses that would make the N1trillion achievable lie with everybody and the industry that have not taken insurance before because each person have needs. They should stop asking where the business is in a country of over 150 million people. If insurance companies target 10 million Nigerians for one form of insurance or the other or for one single product of which they would pay an average of N10,000, this will go a long way for the industry,” he said.

    It is expected that the programme will enhance citizens’ access to relevant, affordable and problem- solving insurance products and lower insurance gap from 94 per cent to 70 per cent.

    The products are occupiers liability (public buildings) insurance, which protects third parties and commercial users who may sustain bodily injury, death or property damage as a result of fire, flood, earthquake storm or collapse of occupied private business and public premises.

    Builders’liability insurance, which protects the site workers; third parties and members of the public from construction-related risks, including collapse of buildings under construction.

    Employers’liability insurance, which protects the labour force, especially the factory workers from work-related injuries and sickness occurring in course of employment.

    There is also the statutory group life insurance policy, which is meant to protect the public and private sector employees, who may die, become mentally or physically disabled or disappear while still in service

    Also, the health care professional indemnity insurance, which is meant to protect the National health insurance scheme patients from the errors, negligence and acts of commission or omission of medical practitioners and institutions.

  • STI supports arts

    Sovereign Trust Insurance (STI) Plc has extended its intervention initiative to the thespian arts with its partnership with the Playhouse Initiative on the production of ‘KAKADU the Musical’, which opened with the premiere performance on May 9.

    The musical play explores the life and times of Lagos post-independence through the civil war right to the days of the successive military coups in the country. It was set around the famous night club in Lagos in the 60s called Kakadu.

    According to the Associate Producer of th play, Winifred Nwokedi, Kakadu the Musical is “essentially the story of Lagos and how the city of infinite possibilities lost her innocence as a result of events occurring outside the city. The combination of the story and the music results in a most captivating musical production of the like that has never been done in Nigeria”.

    Spokesperson to the insurance firm, Segun Bankole, said the company’s support for the play is borne out of the need to relive a culture that is almost getting moribund.

    For STI, the play affords the organisation the opportunity to bring in the history of Lagos to the new generation of its inhabitants and Nigerians at large through the essence of theatre.

    He said the theatre in those days served as a rallying point for families and friends in terms of education and entertainment that were intellectually stimulating, but that the situation had really got to its lowest ebb and the theatre was fast losing patronage and something had to be done to revamp the theatre, especially among the youths.

    He also said, in line with the pioneering stance in the industry, “we want to be part of the change agents that will revive the theatre culture just as we continue to push for an insurance culture amongst Nigerians in the country; that for us is the nexus”.

    The Writer and Director of Kakadu the Musical, Uche Nwokedi (SAN), expressed his appreciation to the Management of STI and other corporate organisations and individuals who supported the project from incubation to the performance.

    He called for such collaborations, noting that they would boost the creative economy.

  • NAICOM, NAIC sign MoU on training

    NAICOM, NAIC sign MoU on training

    The National Insurance Commission of Nigeria, (NAICOM) and the National Association of Insurance Commissioners (NAIC) of the United States have signed a Memorandum of Understanding (MoU) on training and technical assistance.

    In a statement, NAICOM’s Assistant Director, Corporate Communication, Mr. Rasaaq Salami, said the purpose of the memorandum is to help maintain efficient, safe, fair and stable insurance markets in Nigeria and the US for the benefit and protection of policyholders, by providing a framework for co-operation, increased mutual understanding, exchange of information and technical assistance to the extent permitted by respective laws, regulations and requirements.

    He said: “Both NAICOM and the NAIC believe such cooperation will enable them to effectively regulate the industry and entrench international best practices more than ever before.

    “Nigeria’s Commissioner for Insurance, Fola Daniel and the president of NAIC/Commissioner, Louisiana Department of Insurance, James Donelon signed the MoU on behalf of both parties at a well-attended ceremony at the Willard InterContinental Hotel, Washington, DC in the United States.

    “Under the agreement, the authorities will provide mutual assistance periodically through training held in the host country; participation in internships with specific educational focus; educational seminars held in the host country, provision of training manuals/materials and any other issues of common interest.

    “Similarly, both NAICOM and the NAIC have reiterated the importance of complying with the International Association of Insurance Supervisors (IAIS) Core Principles for effective insurance supervision and the Financial Action Task Force (FATF) recommendations on Anti-Money Laundering.”

    NAIC is a non-profit Delaware corporation comprising chief insurance regulatory officers in the 50 states, the District of Columbia and the US territories.

    NAICOM signed a similar MoU with the National Insurance Commission (NIC) of Ghana in August, last year.

  • FBN Life drives bancassurance products

    FBN Life Assurance Limited, a subsidiary of FBN Holdings Plc, has introduced new distribution channels through its partnership with FirstBank of Nigeria’s over 700 branches nationwide to drive its bancassurance products.

    Managing Director and Chief Executive Officer of the company, Val Ojumah, said in Lagos that the company intends to deliver sustainable benefits by providing comprehensive insurance solutions to the bank’s customers.

    He said: “In this partnership, FBN Life is exploring more distribution partnerships to facilitate wider coverage for customers at their preferred points of sale. We are at the moment engaging multiple partners including Micro-finance banks, Mobile Network Operators and other commercial banks, in order to expand our coverage beyond the FBN reach.

    “We are building the biggest retail Insurance Company in Nigeria by developing alternative channels and delivering innovative products to the customer, thus making insurance products accessible across all market segments and distribution channels”, Ojumah noted.

    At present, the company has three of its retail products that can be accessed in any of the FirstBank Branches or FBN Life offices nationwide.

    The products include the First Life Benefit, First Life Plus Benefit Plan; Health Insurance, Burial Expenses Benefit and the First Family Shield.

    According to him, these products are designed by FBN Life to provide value to the bank’s customers and are distributed through First .

    This platform, Ojumah said, provides the bank’s customers a range of financial products from a single point of contact, convenient access to hassle free and seamless insurance and lower premiums as a benefit of being First Bank customers.

  • ‘New road map for sector coming’

    The Chairman, Pension Fund Operators Association of Nigeria (PENOP), Mr Dave Uduanu, said the group has reviewed the developments in the industry from inception and has charted a new road map for the sector.

    He said the regulator was taking all steps necessary to ensure that state governments key into the Contributory Pension Scheme, adding that PenCom released the guidelines so that state governments that want to access the pension fund by way of issuance of bonds would not only participate in the scheme, but be committed in remitting the monthly contributions of their workers to contributory pension scheme.

    For this reason, he said, the regulator had introduced more stringent requirements to ensure that the states would not stop contribute after accessing the fund.

    “What we try to do is to equate pension payment with salaries and, therefore, put in place a mechanism to ensure that at the end of every month, paying pension would no longer be discretionary.

    The idea, Uduanu added, was to make pension rank at par with salaries, noting that a greater percentage of the pension funds was allocated to the bond market, especially the Federal Government bonds.

    The Pension Fund Administrators, he added, were working with the government to find ways through instruments, mechanisms and the money market to expose the funds to the real sector.

     

     

    He said the PFAs were speaking with the regulator, the government and International Finance Corporations interested in growing the economy.

    According to him, the more the real sector grows, the more employment will be created and the more the pension business will grow.

  • PENCOM to open zonal offices

    PENCOM to open zonal offices

    The National Pension Commission (PENCOM) is to open offices in all the zones in the country.

    The offices would be located in Calabar, Awka, Gombe, Kano and Ilorin.

    They would be empowered to carry out pension duties, which are only been done in Abuja.