The Nation Newspaper

Category: Insurance

  • Dana Air crash: Lawyers accuse Prestige, others of laxity

    A firm of solicitors and legal consultants, M.O. Awoyemi & Co , has accused Prestige Assurance PLC of neglecting the family members of those who died in the Dana Air crash in June, last year.

    The firm, which represents 40 families, who died in the crash, said the insurance firm refused to pay its clients the mandatory $30,000 claims as stipulated by international law, seven months after the crash.

    In a statement made available to The Nation and signed by its Managing Partner, Dr Bunmi Awoyemi, the law firm accused Prestige Assurance and its reinsurers, Pritchard Insurance Limited/Lloyd’s of London, of not caring for the family members of the crash victims.

    He said of the 40 families, only 13 have been paid the $30,000 each.

    He said out of the over 150 victims involved in the crash, only 80 of their family members have been compensated, adding that many of them include families, who lost more than one member. For such families, most of them were paid $30,000 per family, instead of the mandatory $30,000 per victim.

    He said the insurer and re-insurers deliberately want to postpone the amount to be included with the balance of $70,000 they are offering to make victims family members sign-off their rights to a law suit.

    He said: “They are doing this despite the fact that the Civil Aviation Act makes the payment of $30,000 per victim mandatory and payable within 30 days of any air crash.

    ”This wicked and callous action is being perpetrated by Prestige Assurance PLC and its re-insurer of 70 percent of the risk, Pritchard Insurance Limited/Lloyd’s of London, who have instructed their solicitors to pay only $30,000 per family, which explains why the Oyosoro’s and Ibe’s were each paid $30,000 instead of $60,000 despite the fact that they each lost two family members each. As of today, only one more of our remaining clients has been paid.”

    Awoyemi condemned the Aviation Minister and the Nigeria Civil Aviation Authority (NCAA) for allowing Dana Air to resume operationswhen it has not paid compensation.

    He said: ”One hundred and sixty lives were lost; many of the relatives of the dead are still dealing with the issues arising from the death of their family members. In fact, some are yet to pick up the bodies of their dead relatives; while some family members only got body parts, others are yet to find the bodies of their relatives because their bodies were incinerated.

    He said based on his earlier petition to the Aviation Committees of the Senate and the House of Representatives, a report recommending the withdrawal of Dana Airlines operating licence for a number of reasons, including the fact that they were yet to pay proper compensation to the victims of the crash was issued.

    Furthermore, the House of Representatives passed a resolution adopting the recommendations of these Committees and called on the Minister of Aviation to implement the recommendations.

    “I am shocked that the Minister of Aviation still went ahead to write Dana Airlines authorising their resumption of flight in defiance of the recommendations of the report of the Joint Aviation Committees of both the Senate and House of Representatives and in defiance of the resolutions of the House of Representatives.”

    Awoyemi said what Dana and Prestige Assurance are doing in Nigeria cannot be tolerated in any other country. He called on the Federal Government and well-meaning Nigerians to warnDana and Prestige Assurance to respect Nigerians.

    However, the Managing Director of Prestige Assurance Plc, Annand Mittal, denied the allegation. He said as soon as they receive the advice to pay, they would pay others.

    He said the decision to pay comes from Dana Air management through their lawyers.

    Mittal said, to date, they have paid 80 victims the mandatory 30 per cent, adding that the balance would be paid by Re-insurers, Pritchard Insurance limited and Lloyds of London.

    He added that it is not their responsibility to determine who to pay, but that of Dana Management.

  • CIIN advises firms on staff training

    INSURANCE firms have been advised to raise their training budgets to prepare their staff for increased productivity and the challenges ahead.

    The President, Chartered Insurance Institute of Nigeria (CIIN), Dr. Wole Adetimehin, said underwriters and brokers have assured of improved budget on staff training, adding that they have realised that the best assets is their human capital.

    He noted that the CIIN management had engaged the operators on the need to see the institute as theirs, adding that the body has continued to find ways of enhancing the human capital of the industry.

    Adetimehin said over the years, most companies reduced their budgets for training.

    He said: “I suspect that the budget for training has been falling. I do not have the figures, but I suspect that there have been some scaling down of budget for training over the years. This is a major challenge.

    He said members of the industry were getting the best on training from the institute, stressing that operators are encouraged to seek knowledge from every reputable sources to develop and re-develop themselves.

    He said for the industry operators to remain relevant, they must seek and get adequate training.

  • Insurers urged to seek more training

    TO remain relevant in the industry, the Director-General, Chartered Insurance Institute of Nigeria (CIIN) Mr. Adegboyega Adepegba has urged insurance practitioners to get adequate training.

    Adepegba told The Nation that the body has been given statutory powers to train and retrain insurance professionals, noting that it is doing its best to ensure that professionals are well-trained before they are certified.

    He said for anybody to become a professional, he must have passed the institute’s exams. He explained that they are in three parts: certificate, diploma and advanced diploma.

    He added that the institute provides many services, which enable the students to be prepared for the exams.

    Explaining the mode of operation, Adepegba said: “We also have a college trains those who would take the examinations and those that will come in for refresher courses.

    “The institute also has some exam programmes that it conducts regularly, annually and others at intervals, such as conferences, seminars, in-house programmes and the Mandatory Continuous Professional Development (MCPD).

    He said under him, insurance education has improved, noting that members of the institute are getting the best training.

    He added that education is not something one gets from one source, advising students and members of the profession to develop and re-develop themselves.

    He said the MCDP programme ensures that students write, carry out research and attend programmes that can broaden their knowledge about the practice of insurance.

  • Mutual Benefits Assurance, others win awards

    The Management of Inspenonline has named the President, Nigerian Council of Registered Insurance Brokers (NCRIB) Mrs Laide Osijo, the Insurance Man of the Year 2012.

    She emerged top out of many insurance operators considered for the award. Within the short period she has been in the saddle of leadership of the largest insurance brokers’ fraternity in African, she has distinguished herself and has used her wealth of experience to reposition insurance practice.

    Commissioner for Insurance Fola Daniel was awarded the Good Leadership Award for his steps in repositioning the industry and providing adequate security for policyholders.

    Mutual Benefits was named the Insurance Company of the year. It was picked as a result of its stride in retail insurance through well- developed micro-insurance channel.

  • IEI settles N990m claims

    International Energy Insurance Plc has said it made N990 million claims settlement between January and October of the last financial period.

    In a statement the firm said this was part of the company’s promise to settle claims to its insured clients promptly.

    According to the statement, this shows the company’s core values of proficiency, integrity, innovation, dependability and friendliness, which had been earning IEI trust and loyalty from its customers.

    Managing Director/Chief Executive, Mrs. Roseline Ekeng, said transparency and reliability were the most enduring values to earn customer trust.

    She stressed that the business environment requires more open hands and doing what you say.

    “The customers are wiser and more exposed today to global best practices, and no well-meaning underwriter will hide under any guise,” she added.

    According to the statement, different categories of the claims settled covered motor, fire, general accidents, marine cargo, marine hall, bond, oil and gas, industrial risks, public liability and aviation.

    It stated that IEI is one company that got right its core strategic business direction which is energy insurance.

    The company said it has sound technical and experienced energy underwriting unit in Nigeria.

    “With the best crop of hands and sound management, IEI has demonstrated a consistent growth-led business model that has withstood the test of time,” the statement added.

  • Violators of ‘no premium, no cover’ policy to pay N500,000 fine

    Violators of ‘no premium, no cover’ policy to pay N500,000 fine

    Firms and brokers that flout ‘no premium no cover’ policy of the National Insurance Commissionin (NAICOM) are liable to N500,000 fine, it has been learnt.

    A document from the Commission states: “As a result of the growing challenges arising from huge levels of outstanding premium reported in the financial statements of insurance companies, and to protect the interest of policy holders and other stakeholders from negative consequences of the gaps in existing practice, insurance brokers and underwriters are required to comply with the requirements.

    “Any insurer who grants cover without having received premium or premium notification from the relevant insurance broker, shall be liable to a fine of N500,000 in respect of each cover so granted.

    “All insurance brokers shall within 48 hours of receiving insurance premium on behalf of any insurer, notify the insurer in writing in each case, of receiving such insurance premium. An insurance broker who fails to notify the insurer of any premium received on his behalf shall be liable to a fine of N250,000 in each case of failure to notify.”

    In the case of a lead insurer and co-insurers, it indicated that a lead insurer, who fails to pay other co-insurers premiums received on their behalf within 30 days, shall be liable to a penalty of 10 times the amount of premium not remitted.

    The document said that insurers shall quarterly, and not later than 30 days after the end of each quarter, notify the commission of premium acknowledged as having been received by the brokers, but not remitted to them.

    It said any insurer that failed to render this return shall be liable to a fine of N5,000 daily for which the non-rendition continued.

    On the insurance brokers, the NAICOM new rule indicated that insurance brokers shall quarterly and not later than 30 days after each quarter, render to the Commission returns of premium received and unremitted to the insurers.

    The Commission said any broker that failed to render this return shall be liable to a fine in the sum of N5,000 for each day for which the non-rendition continues.

    Penalties imposed on an insurance operator before the new circular shall be disclosed in its annual financial statements and report to shareholders, the Commission stated.

    However, the Managing Director, Royal Exchange Prudential Life, Wale Banmore, praise NAICOM for the policy.

    He told The Nation that about one week into the implementation of the policy, so many clients who otherwise would just have written, expressing their intention to stay on cover, had really backed it up with payments.

    He said: “I don’t want to mention names, but it is vey encouraging, it has not been like that in the past years. There may not be a 100 per cent compliance from day one, but it is an ongoing exercise.”

    Banmore said the position of NAICOM became necessary because of the Commission’s desire to help both the public and the underwriting firm, stating that the law is not new as it has been in existence, even before the insurance Act of 2003. “What the law is simply saying is that there will be no cover unless the premium is fully paid, that is what is done worldwide, he added.

    He explained that there are two ways insurance premiums can be paid, either directly to the insurance firms, or through the intermediaries, such as registered agents or brokers who will make the full payment to the underwriters before a cover can be granted.

    Banmore said it has always been like that, but due to exigencies and other factors, people will insure their properties. However, the premium will not be paid on time, adding that some only come to pay when there is a claim. This is what NAICOM is out to fight because it has put a lot of strains on the underwriters, he said.

    He said NAICOM is out to protect the public by insisting that insurance firms must be ready to pay their claims when it is due, and at the same time protect the firms so that they can ensure their funds come to them as at when due, stating that every cover must be accompanied by premium payment.

    The Royal Exchange Prudential boss said the government is not exempted from the rule. “Although the government contributes about 60 per cent of insurance premium to most insurance companies, the rule does not exempt them,” he said.

    He said the industry is watching to see how the government would respond, but he assured that if there is no payment from the government and a claim occurs, no insurance company in Nigeria would respond.

    He said NAICOM is watching underwriters and has thretened to sanction any firm that may flout the order.

  • Insurers advise govt on disaster management

    Insurers have asked the government to mitigate losses arising from human and natural disasters in the country.

    Managing Director, Royal Exchange Prudential Life, Mr Wale Banmore, said one way to do this is for the government to ensure that Nigerians embrace appropriate insurance.

    Banmore said it was wrong for the government to raise money to compensate victims of disasters while insurance companies, whose responsibilities are to indemnify people would have done that without taking a kobo from the government.

    He said the government should ensure that everyone are insured.

    He said the government should help its citizens to ensure that insurance firms pay appropriate claims to the citizens when disasters occur and not compensate those who suffer losses.

    Banmore said despite the damages that the Hurricane Sandy brought upon Americans, the government did not use public funds to compensate victims because the insurance companies are there to do that. He said if government stopped this practice all parties would benefit.

    Also, Chief Executive Officer, Custodian and Allied Insurance Plc, Mr Wole Oshin, said to mitigate losses arising from disasters, the government should put in place insurance schemes and other processes that would protect the citizens against such disasters.

    He argued that nobody expected crisis human and natural witnessed in the country in recent times.

    He said such crises have started happening, and that the government should put in place structures and processes to mitigate the risks.

    He explained that the government should not continue to fund the disasters caused by climate change or man.

    He said: “Some years ago, we never thought some of the disasters we are seeing in Nigeria could happen. We do not know when it would happen next and when it happens,” adding:’ “Will we go through this process again of raising funds, donating materials and so on? “

     

     

     

     

     

     

  • Key drivers for insurance growth in 2013

    DESPITE the inability of insurance industry to meet its set target of N1 trillion premium income projections last year, operators are optimistic that the entrenchment of some basic fundamentals last year would prop the industry to lofty heights this year.

    To reposition the industry, stakeholders have identified proper budget implementation, enforcement of insurance laws, adherence to ethical practice, among others, as key drivers that will propel growth in the industry.

    President, Chartered Insurance Institute of Nigeria (CIIN), Wole Adetimehin, said the operators hope that the implementation of the budget would be timely and decisive, adding that the government has raised the hope of the public by ensuring that the budget was passed before the close of last year.

    President, Nigerian Council of Registered Insurance Brokers (NCRIB), Mrs Laide Osijo, noted that the government should ensure that the budgetary provision for insurance should be well used, and that it should not be diverted.

    She said the response of insurers to the budget would also help to drive the industry and the operators’abilities to study the budget to ascertain where to take pragmatic steps to tap into it, would help push the industry up.

    The enforcement of compulsory insurance laws, such as motor third party policy, insurance of buildings and buildings under construction, among others, would help prop the industry.

    Observers believed there should be a collaboration between the industry and government’s security authorities to ensure implementation of the laws.

    Managing Director Riskguard-Africa Nigeria Limited Yemi Soladoye, said the N1 trillion projection tied to the Market Development and Restructuring Initiative (MDRI) programme failed due to delayed implementation.

    He noted that the programme was to start in 2009, but took off in 2011, leaving two years out of the implementation schedule.

    “Most people are reading the strategy document and not relating it to when implementation took off. If there is a projection that in year four, we will get N1 trillion and as we could see from the paper, we were to start in 2009, we had what we were to achieve in 2009, 2010, 2011 and 2012. So, N1 trillion is in year four which is 2012. If implementation started in 2011, it will be a case of shifting the deliverables forward based on the difference on the ground between the strategy crafting and the implementation,” he said.

    The policy on ‘No Premium No Cover’ has been adjudged as one of the best initiatives to sanitise and boost the industry’s premium income.

    Osijo said what the administration in National Insurance Commission (NAICOM) has done to bring sanity into the industry is a right step in the right direction, adding that underwriters accusing brokers of non-remittance of premiums will be a thing of the past with the introduction of the policy.

    NAICOM has said from January 1, this year, any underwriting firm that provides insurance cover without collecting the premium would be liable to a penalty of N500, 000 or lose its licence.

    It noted that insurance covers shall only be provided on ‘no premium no cover’ basis, adding that only cover for which payment has been received, directly by the insurer or indirectly through a duly licensed insurance broker, shall be recognised as income in the books of the insurer.

    NAICOM said any insurer, who grants cover without having premium in advance or notification from the relevant insurance broker shall be liable to a penalty of N500, 000 on each cover so granted, and in addition, may be a ground for suspension of the licence of the insurer.

    On professional practices, the Chartered Insurance Institute of Nigeria (CIIN) has threatened to withdraw its certificates from members who engage in unethical practices.

    Its President, Dr Wole Adetimehin, said the institute reserves the right to withdraw its certificate from any holder, if it discovers any breach, adding that further reason for such withdrawal of certificates may emanate from acts unbecoming of a holder of the institute’s professional qualification.

    “Permit me to reiterate the policy of council regarding certificates issued by the institute as the institute’s property, which could be withdrawn from the holders if the institute has good reasons to do so.

    “Let me state categorically that the institute reserves the right to withdraw its certificate from any holder, if it discovers any breach of the examination process. A further reason for such withdrawal of certificates may emanate from acts unbecoming of a holder of the Institute’s professional qualification, “ he said.

    Curbing the unethical practices between underwriters and brokers, observers say that would enhance the industry’s performance and build a lasting trust that would make the industry grow high premium income.

    Over the years, underwriters and brokers have often engaged in premium war, which, observers believed, has hampered growth.

    Proper implementation of the Nigerian Content Act on insurance would open up the billion dollar oil and gas business to operators, who have been empowered to underwrite 70 per cent risks in the sector.

    Insurers have called on oil and gas operators to lower the hurdles placed on their way. They believed their engagement would give them the opportunity to acquire more knowledge on oil and gas underwriting.

    Insurance brokers are worried by the enormous demands by the Nigerian National Petroleum Corporation (NNPC) in engaging them for its risks.

    They said the NNPC has placed difficult hurdles to restrain brokers from qualifying for risks allotted to local brokers by the Nigerian Content Policy.

    They said 34 brokers were engaged for the NNPC account in 2011, but the number was reduced to 14, last year. Insurers have, therfore, called for a rise in the number this year.

    Operators called for the development of infrastructure to reduce their overheads and enable them to enhance their operations.

    Adetimehin said: “We do hope the government would do a lot more this year to ensure better development of right infrastructure in power supply, energy and job creation. Because, these are basic elements that could propel economic performance.”

    Observers believed the fight against corruption would help insurance attract positive image home and abroad.

    They appealed to the public to join hands with the government in the fight against corruption, stressing that corruption is a problem that cannot be fought by the government alone.

    They noted that though the public look up to the government to set the pace, the citizens should operate on high integrity to ensure that they shun corruption, so that the nation’s image and ranking before the rest of the world could be improved upon.

  • Decentralised agric insurance will boost participation, say experts

    THE decentralisation of agricultural insurance will allow many firms with the wherewithal to offer their products in the area, Managing Director, Sovereign Trust Insurance Plc, Mr Wale Onaolapo, has said.

    During an interview, he said his company would be interested in anything that could contribute to the growth of the industry.

    He said through decentralisation of the insurance scheme, farmers would have better prices to choose from.

    At present, agriculture insurance cover to farmers is provided by the Nigerian Agriculture Insurance Corporation (NAIC).

    Commissioner for Insurance, Mr Fola Daniel said NAIC has enjoyed the support of the Federal Government as it has been subsidising some insurance to encourage farmers to get cover.

    However, to make the insurance more available for farmers, he said agriculture insurance was being deregulated to make more insurance firms to participate in the subsector.

    Director-General, Nigerian Insurers Association (NIA), Mr Sunday Thomas, said though farmers have a lot to gain from insurance, many of them lack awareness and are poorly funded.

    He noted that Nigeria can have a vibrant agriculture industry, adding, however, that the reverse was the case.

    According to him, considering the opportunities available in the sector, it could have been the mainstay of the nation’s economy by providing wealth and creating employment for the people.

    Thomas noted that farmers were faced with numerous challenges that were hindering their ability to produce in large quantities. Some of the challenges include poor funding, inadequate storage facilities, climatic factors as well as infrastructural deficiencies, among others, he said.

    President, Risk Surveyors Association of Nigeria (RISAN), Mr Jacob Adeosun, said if the government is serious about insurance awareness and penetration, Nigerians should be encouraged to embrace insurance as a way to avert disasters.

    He said diverting money meant for other development projects and begging people in the name of seeking donations is not a sustainable way of helping the society. Besides, he said most of the donations end up in wrong hands because of the corruption.

    He said over the years, local farmers had continued to encounter challenges in production, a factor that had been militating against their ability to produce in large quantities and become export oriented.

    According to him, insurance can cover food crops of different categories, adding that crops could be insured against so many disasters, such as flood, drought, pest, disease and others, goods in transit could be insured against losses or damages.

    Managing Director, Continental Reinsurance Plc, Dr Femi Oyetunji said NAIC is the firm that insures agriculture in the country, but noted that since NAICOM was regulating insurance, there was the need to ensure capacity build for more local insurance firms to provide this kind of cover. ”With a population of over 160 million agriculture is very important to us as it is a major focus of the government. So, the ability of the government to achieve its aim in agriculture depends on the ability to provide the right type of insurance to the farmers and even to the suppliers of farm equipment”, he said.

    Meanwhile, NAIC has assured farmers whose farmlands were destroyed by the flood that they would be compensated.

    While sympathising with the victims of the disaster, NAIC’s Acting Managing Director, Dr Tijani Garuba, advised them to take advantage of the corporation’s services to mitigate their losses, adding that the Federal Government established NAIC to provide succour and extension services to farmers who insure with the corporation.

     

  • Only 5.4m workers are registered for pension, says Ahmad

    With a workforce of 40million, only 5.4 million and registered under the National Pension Scheme, former Director-General of the National Pension Commission (NPC) Mohammed Ahmad has said.

    He said there were to pension assets stand at about N3 trillion.

    The commission, he said, was working to ensure that small employers in the private sector embraced the scheme, adding that getting such employers, inadequate education and enlightenment remained a great challenge to the industry’s growth.

    He noted that to encourage more people to embrace the scheme, the commission hopes to introduce customers service index, which would ensure that customers get better services from PenCom and operators.

    Ahmad said the commission has continued with its regulatory and supervisory philosophy, which is risk-based and consultative, adding that investment regulation that would allow multiple fund is being reviewed.

    He said the Retirement Savings Account (RSA) transfer clearing system application that would be used to coordinate the processes relating to the transfer of retirement savings accounts is being developed and tested to ensure that it meets the capacity and robustness required.

    “As part of the implementation of the opening the transfer window, the Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs), who are key stakeholders on the pensions industry, would participate in the various workshops geared towards ensuring their full understanding and participation in the transfer process, before the window opens.

    Ahmad noted that the commission would collaborate with state governments in the scheme in the states.