The Nation Newspaper

Category: Insurance

  • NAICOM resolves N1.22b claims disputes

    NAICOM resolves N1.22b claims disputes

    The National Insurance Commission (NAICOM), through its Complaints Bureau, has facilitated the settlement of N1.220billion claims which were in dispute in the first half of this year.

    A statement by the Assistant Director, Corporate Affairs, NAICOM, Lucky Fiakpa, said the Bureau resolved 52 cases within the period.

    He said the Bureau dealt with a total of 349 cases and held four adjudication meetings, adding that out of this figure, 86 were fresh complaints, while the remaining 263 are existing/on-going cases.

    Fiakpa, said the outstanding claims are currently receiving the attention of the Commission, with a view to achieving a quick resolution of the isues to the satisfaction of all stakeholders, particularly, members of the insuring public.

    He said: “The resort to the Bureau for settlement of claims disputes by the insuring public, is an indication of the level of awareness of this channel of dispute resolution in the Commission.

    “Insurance companies have been made to accept the fact that it is no longer business as usual, as their responses and compliance with the Commission’s directives had witnessed an improvement compared to previous periods.

    “Consequently, not less than 85 per cent of the insurance institutions responded to queries or directives issued to them for claim settlement during the period.

    He said majority of the 15 per cent residual, are largely claims already before courts of competent jurisdiction and therefore prejudicial for the Commission to intervene.

    He said the complaints received this year were mainly those involving non settlement of claims on Motor Insurances, Marine, Life, Bond Issues and Pension matters, stressing that the complaints were received from individual policy holders, beneficiaries, government agencies, SERVICOM, Legal Aid Council and Public Complaints Commission.

  • ‘Why decision on IGI Pension, Citi Trust is pending’

    ‘Why decision on IGI Pension, Citi Trust is pending’

    The National Pension Commission (PenCom) is yet to take a decision on the fate of two Pension Fund Administrators (PFAs), Industrial and General Insurance (IGI) Pension Limited and Citi Trust Pension Limited over their inability to meet recapitalisation deadline.

    Investigations revealed that Citi Trust Pension Limited has gone to court to challenge the intention of the Commission to revoke its operational license over the issue. It was also gathered that the commission is taking its time to verify the claims by IGI Pension. PenCom gave the two firms 28 days revocation notice within which to capitalise to the tune of N1 billion, or be axed. The deadline elapsed last month.

    The Deputy Managing Director, Industrial and General Insurance (IGI) Plc, Rotimi Fashola, said the company actually recapitalised as required by PenCom by pooling together cash and assets which amounted to far more than the specified N1 billion mark.

    Fashola said: “It is true that PenCom has sought clarifications from us on some matters, but the process of recertification is ongoing and every grey area will be resolved in accordance with the law. We are making representations to the commission and are of the strong conviction that it would reconsider its position after listening to us.

    “It is unfair and erroneous to make the public believe that IGI PFA failed to meet the recapitalisation requirement when in fact, the company capitalised up to N1.5 billion in cash plus property. This amount is N500 million above the mark set by PenCom.

    “For the avoidance of doubt, let me state categorically without any fear of contradiction, that it is outright falsehood that our PFA license has been revoked. Our licence is intact and we remain a leading player in the industry.”

    PenCom released the report of its recapitalisation exercise, last month. Inm it, 18 PFAs met the recapitalisation target; three were acquired, while two failed to raise the minimum capital of N1billion.

    The commission had mandated all pension fund managers to shore up their capital base from N150m to N1billion or be wound. The release of the report followed the completion of the verification of their capital base to determine their level of compliance. The exercise, which was carried out from the beginning of July was imperative in order to verify the sources of funds of all the PFAs that claimed to have met the recapitalisation target.

    This, according to the commission, was to ensure that illegal funds did not find their way into the system.

    Those that cleared the recapitalisation hurdle are ARM Pension Managers Limited; Leadway Pensure PFA Limited; Premium Pension Limited; Sigma Pensions Limited; Stanbic IBTC Pension Managers Limited and Trustfund Pensions Plc.

    Others are Aiico Pension Managers Limited; APT Pension Fund Managers Limited; Crusader Sterling Pensions Limited; Fidelity Pension Managers Limited; Future Unity Glanvills Pensions Limited; IEI-Anchor Pension Managers Limited; NLPC Pension Fund Administrators Limited; Legacy Pension Managers Limited; Oak Pensions Limited; Pensions Alliance Limited; Penman Pensions Limited and Royal Trust Pension Fund Administrator Limited. It, however, added that three others were acquired by other PFAs, while First Guarantee Pension Limited is under regulatory intervention.

    Amana Capital Pension Limited was acquired by Sigma Pensions Limited; Crib Pension Fund Managers Limited was acquired by Oak Pension Limited, while Evergreen Pensions Limited was acquired by Oak Pension Limited, a statement from the Commission issued by the Head, Communications Unit, Pencom, Mr. Emeka Onuorah, said.

    Meanwhile, the Commission is to undertake customer satisfaction survey to ascertain whether contributors are getting optimal services from their Pension Fund Administrators (PFAs), its Director General National Pension Commission (PenCom) Mohammad Ahmad has said. He said the move is part of the commission’s effort to ensure contributors are properly served.

    Ahmad noted that as part of the commission’s supervisory mandate, it had cause to impose sanctions on operators for failure to render returns promptly and inability to send Retirement Savings Account (RSA) statements to contributors

    He said: “As part of its supervisory mandate, the Commission had cause to impose sanctions on operators in respect of a number of issues. The issues include failure to render returns promptly and inability to send RSA statements to contributors.

    “In serious cases of weak corporate governance, the Commission had intervened to remove directors and takeover the management of the affected operators in order to safeguard the pension assets.

    “The issue of service delivery is taken seriously in the pension industry. To that end the Commission intends to undertake customer satisfaction survey and develop regular satisfaction index.”

    He said the payment of benefits to retirees in the private sector had been regular and timely and that recently the payment of retirement benefits to retirees as well as death claims to beneficiaries of deceased federal government employees has been challenging due to funding problems of the government.

    Ahmad said the administration of pension has no doubt been enhanced with the passage of the PRA 2004, stressing that not only has the Act provided a platform for a more effective, efficient and transparent administration of pensions in the federal public service and the private sector, but also generated a pool of long term fund for investment that already had positive impact on the growth of the economy.

  • Equity Assurance pays N556m in 8 months

    Equity Assurance Plc has paid total claims amounting to N556 million in the first eight months of the year, a statement issued by the Head, Corporate Communications of the Company, Mr Tunde Amolegebe stated. The claims settled covered all classes of business underwritten by the company within the period.

    The breakdown of the claims payments reveals that a total of N242 million was paid on fire insurance,N114 million paid on motor vehicle insurance business and N86.9 million paid on general accident insurance. Other payments were on marine insurance claims – N65.1million, oil and gas insurance – N37.7 million and N9.7 million paid on engineering insurance business.

    Some of the company’s clients whose claims were paid within the period include: Friesland Wamaco, Sterling Oil Exploration and Bourbou Interoil Limited. They were paid N131.8 million, N37.7 million and N19.3 million. Others are Panaserv Nigeria Limited – N18.7 million, Ceveae International Limited – N10.3 million and the Nigerian Police – N33.3 million among others.

    The current sum paid as claims represents an increase of 17.31 percent over the sum of N474.4 million paid in the same period in 2011.

     

  • CIIN, NCRIB seek govt’s support for industry

    CIIN, NCRIB seek govt’s support for industry

    The President, Chartered Insurance Institute of Nigeria (CIIN), Dr Wole Adetimehin and his counterpart in the National Council of Registered Insurers Brokers (NCRIB), Mrs. Laide Osijo, have called on state governments to support the industry by procuring policies to cover their risks.

    Adetimehin, made the call during a visit to the Ogun State Governor, Senator Ibikunle Amosun in Abeokuta, on the one hand, and Ondo State Governor, Olusegun Mimiko, in Akure, recently.

    Adetimehin said support from governments, would go a long way in promoting service delivery and enhance international best practices.

    He said there are compelling reasons why the citizenry and governments should take insurance more seriously, adding that Nigerians are under daily threat from risks emanating from natural disasters such as floods, rainstorms and security risks which are taking their toll on the citizenry.

    He noted that the low insurance contribution to the economy stemmed from lack of necessary infrastructure, adding that lack of basic needs prevent people from making insurance part of their priorities.

    He said: “With unemployment at an estimated 23.9 per cent in 2012, the Insurance business in Nigeria is hardly able to improve on its contribution to the nation’s GDP, above one per cent, unlike in South Africa where it is 15 per cent. The reason for this is because citizens are apparently laden with costs which are channeled at the procurement of otherwise basic and fundamental needs such as electricity, water and security, these, he said prevent them from making insurance part of their priorities.

    “I am delighted that some state governments are making positive efforts in the improvement of citizens’ welfare and this includes Ogun State. We wish to also seize this opportunity in requesting Ogun State and other state governments to provide a level playing ground for the insurance companies within the states in the procurement of state insurances.

  • NCRIB decries undervaluation of govt’s assets

    The undervaluation of government’s assets is capable of slowing down the pace of development of insurance, the President, Nigerian Council of Registered Insurance Brokers (NCRIB) Mrs Laide Osijo, has said.

    She said this during a courtesy visit by representative of the World Bank to the Council, adding that there is the need for government to further protect the industry by living up to its responsibility, as the largest insurance client.

    Osijo opined that in situations where insurance assets are not properly evaluated, leading to inappropriate rates and premium paid, could lead to the diminution of the growth and depth of insurance penetration in Nigeria.

    She advised that government should make it a priority to attract foreign investment into the country in order to grow insurance capacity, among other things, and ensure that violation of insurance laws are met with appropriate sanctions.

    The NCRIB President commended the World Bank for promoting sustainable global financial development and craved its greater support to the Nigerian insurance industry.

    In his remarks, the Senior Financial Sector Specialist of the World Bank, Mr Anthony Randle disclosed that the visit was part of the Financial Sector Assisted Programme jointly facilitated by the World Bank and the International Monetary Fund (IMF), and coordinated by the federal government, to distil information and about how best the financial services sector could be improved in Nigeria.

    He said part of the issues to be handled by the joint project was to find out and advise government on reasons for low insurance penetration in the country in comparison with some other countries of the world, with a view to seeking a lasting solution to the problem.

  • NAICOM to float unit against money laundering

    NAICOM to float unit against money laundering

    The National Insurance Commission (NAICOM) is to establish a unit with the sole responsibility of fighting money laundering.

    The Nation gathered that the unit which would help monitor the transactions of insurance firms is near completion.

    The project , which has been in the works for about three years now, was conceived to help check fraudulent activities, especially, money laundering.

    Financial institutions, the source at the Financial Action Task Force (FATF) revealed, are at the forefront of the fight against financially motivated crimes.

    He said: “As criminals seek to disguise the true ownership and movement of their illegal proceeds, the insurance sector is ultimately vulnerable to abuse for the purposes of laundering the proceeds from crime. This is why it is imperative to build capacity within the Insurance sector to prevent money laundering and deny wrong doers the benefits of their misconduct.”

    Also, Acting Director, Inspectorate Directorate, NAICOM, Farinu Olusegun, has called on stakeholders to support the government and the commission in the fight against money laundering, adding that the government alone cannot successfully prevent and control the menace without the support of the civil society, especially the private sector.

    He said those who developed the standards against money laundering recognised the role of the insurance industry and therefore included specific obligations and responsibilities for the sector.

    He said NAICOM would continue to forge partnerships with all stakeholders, especially, insurance institutions that should be the vanguard of the crusade against money laundering and terrorist financing, adding that the commission shall sustain cooperation with other organisations at home and abroad to share best practices and promote greater cooperation in their collective efforts.

    Director-General Nigerian Insurers Association (NIA), Sunday Thomas, said insurers have been charged to preserve their customers’ information for not less than 10 years after the end of any transaction.

    Thomas said the move is in line with the industry’s bid to have detailed information of customers. He said companies are to display in their offices the notice stating the corporate responsibility for disclosure of information in respect of transactions above specified threshold.

    He said insurers are also to identify the nature and scope of the business to be transacted, the duty to obtain evidence of identification, keep customers information up to date and review customers’ information at every point of transaction.

    He noted that insurers are to report to the NAICOM observations detrimental to the their operations, adding that they have to also receive and vet suspicious transaction reports from staff; rendering “nil” reports with the Nigeria Financial Intelligence Unit (NFIU), where necessary.

    Thomas urged the operators to develop robust risk management systems, including procedures, internal control and audit systems, perform the necessary Customer Due Diligence (CDD) on their customers, beneficial owners and beneficiaries.

    According to him, operators are also to effectively monitor unusual transactions, take enhanced measures in respect of higher risk customers, keep adequate records of transactions and promptly respond to enquiries by the NFIU in respect of any transaction with any individual, entity, or organisation named in the request.

    He noted that there should also be protection of the security and confidentiality of such requests, create high level awareness and training among the staff, ensuring that all branches and subsidiaries observe appropriate AML measures.

  • CIIN spends N200 million on college

    The Chartered Insurance Institute of Nigeria (CIIN), may have spent over N200 million on the college of Insurance and Financial Management (CIFM) project. The Director General, Mr Adesoji Adepegba, disclosed this while reviewing the achievement of the institute in the last 10 years.

    Adepegba told jouralists in Lagos, last week that the institute was able to mobilise the amount which it has spent on the first phase of the project, saying academic work would start very soon.

    He said the programme will include a two-year certificate in insurance after which graduates would go for a one year industrial attachment and return for another two years Advanced Certificate in Insurance.

    He said the certificates would be equivalent to the Ordinary National Diploma (OND) and the Higher National Diploma (HND), which are handled by the National Board for Technical Education (NBTE).

    The HND certificate is equivalent to a degree, he said, adding that at this stage, the HND insurance graduate of the college will have one or two papers to write to become an insurance professional. He said the effect in the long run will be such that when five people gather, at least one of them would be an insurance professional.

    Adepegba said the objectives of the college include: to provide qualitative education and training for persons engaged in the practice of insurance and allied services throughout Nigeria; to provide consultancy services in the fields of insurance and financial services for the insurance industry in particular and the financial sector of the economy in general and to undertake research in all aspects of insurance and allied subjects relevant to the economic development of the nation. Other objectives of the college according to the Director- General include: to collect relevant data on the insurance industry, maintain a database and provide information on all aspects of insurance for public use; to constitute a research platform for determining the industry’s manpower needs from time to time and to benchmark international standards in insurance and financial management education with a view to making the College a Centre of Educational Excellence globally.

     

  • Royal Exchange Group records N2.37b growth, pays dividends

    Royal Exchange Group has reported 59 per cent growth, equivalent of N2.37 billion for the 2011 business year.

    The Chairman, Kenneth Ezenwani Odogwu, disclosed this to shareholders during its 43th Annual General Meeting (AGM) in Lagos, last week.

    He said despite the uncertainty that characterised the global economy for most part of 2011 and the slow growth rate experienced in key industrial countries, the economy was able to record moderate growth as a result of some well ‘thought-out’ policies of government.

    This, he said, enabled some sectors of the economy to record some level of growth. “ The rise in the money market rate which is attributed to the monetary tightening policies of the Central Bank of Nigeria (CBN), led to the increase in the Monetary Policy Rate (MPR) and this resulted to the sharp increases in the Cash Reserve Ratio (CRR), four per cent in September to eight per cent in October 2011”.

    Odogwu said Royal Exchange Plc and the insurance industry generally, took advantage of the development as their businesses depend on available investments income, adding that this is already having positive impact on the industry.

    He said Royal Exchange Plc achieved a gross premium of N5.24 billion, as against N3.29 billion recorded in 2010. This translated to N2.37 billion as net income before overhead expenses, compared to N1.85 billion in 2010, resulting in an increase of 28 per cent.

    Hr said despite theincrease, the investment income of the company stood marginally at N280.42 million, from N254.36 million in 2010. He attributed this to the slow recovery of the capital market and the relatively low rates that prevail in the money market.

    Analysis of the statement of account revealed that management expenses recorded an increase of 3.8 per cent, fromN1.79 billion in 2010 to N1.86 billion in the review period. The chairman said the increase was kept low as a result of the stringent cost control measures aimed at minimising operating cost without impacting negatively on productivity.

    The group achieved a profit before tax and exceptional item of N105.64 million from its operations, while an exceptional item of N855.84 million increased the profit before tax to N961.48 million.

    On the subsidiaries, the group chairman stated that Royal Exchange Prudential Life Plc, posted a loss of N240 million. He reported that remedial measures have been taken to turn the company around. He announced a dividend of 4 kobo for every 50 kobo ordinary share to shareholders for the year ended December 31, 2011.

  • ‘Positive image will improve industry’

    ‘Positive image will improve industry’

    The Corporate Affairs Manager, Nigerian Council of Registered Insurance Brokers (NCRIB), has said the insurance industry will develop when operators engage in activities that will improve their public image on the one hand and that of the industry on the other.

    He stated this while speaking with The Nation in his office in Lagos. He noted that the industry operators over the years did not care enough about their image. This, he said had cumulated to the poor perception the public has on insurance. He noted that operators’ neglect of professional public relations executives also contributed to the problem.

    “Coming to the realm of insurance generally in Nigeria, it is a known fact that the industry has continued to be bedeviled by multifarious problems, chief of which is image challenge. The problem of poor image and public acceptance has for long limited the growth capacity of the industry and its ability to contribute significantly to national economy”, he said.

    Adaramola said this nagging problem has definitely necessitated the need for ingenious utilisation of public relations strategies by all actors in the industry. He stated further that while insurance acceptability in places like America, Europe and other growing economies in Asia and in countries, such as South Africa, Egypt, Kenya etcetera, are high, the case of Nigeria is remarkably different.

    “It is believed that insurance is bought in such economies, whereas it is sold here in Nigeria. Despite renewed efforts by the regulatory institutions and government to reverse the trend, the industry’s image problem has remained a pain in the neck of the industry,” Adaramola said.

    He noted that every component of the industry need to imbibe public relations but the insurance brokerage sector needs it most. “If there is a component of the industry that must imbibe public relations, mostly at the level of their individual practice, it is the insurance brokerage sector”. It is noteworthy, according to him that Insurance brokers constitute a significant profile of insurance practice in Nigeria in terms of number of practitioners. He said they are also believed to control the greater percentage of the nation’s insurance business.

    “With over 500 registered members of the NCRIB, there is hardly any nook or cranny in Nigeria where you are not likely to find a broker. Consequently, insurance brokers play pivotal intermediary roles between the insured (the public), and the insurance companies.

    “By their professional calling, the insurance broker engages in the selling of insurance products to both corporate and individual clients, assisting them to understand the technicalities of its services for their maximum benefit.

    “It is a commonly held notion that the average client approximates the image and character of an insurance broker or an agent to that of the industry at large.

    “These crucial duties predispose them to be well-rounded both in technical and interpersonal public relations and communication skills. Insurance, being an intangible product could only be assessed, appreciated and accepted by clients depending on the personal presentation by the broker,” he added.

    Adaramola noted that gone are those days when the utilisation of soft public relations skills, such as grooming, etiquette, poise and personal reputation management, were pushed to the background in preference for hard or technical skills or patronage.

  • Brokers protest slash in Local Content briefs

    Brokers protest slash in Local Content briefs

    Brokers have kicked against the reduction of firms handling local content briefs for the Nigerian National Petroleum Corporation (nnpc).

    The corporation, which engaged 34 firms for the exercise last year, cut down the figure to 14 this year, a measure operators criticised as anti-industry growth.
    President, Lagos Area Committee of the Nigerian Council of Registered Insurance Brokers (NCRIB), Tunde Oguntade, said though the number fell below brokers’ expectation, they have expressed their desire for more brokers to be involved in the future.

    He noted that brokers are unaware of the reason for the reduction, adding that it would have been better if more brokers were considered in line with the Local Content Law.
    Nonetheless, the implementation of the law has begun to have impact on the economy in terms of human capacity development, especially in oil and gas, more employment opportunities and greater retention of capital that would have been spent as consultancy fees and salaries for expatriates.

    Of interest is the current development in the industry, where underwriters and insurance brokers have shown greater capacity to insure and reinsure the high net-worth property of government and its agencies, as well as those parastatals.

    A university don, Mrs.Joy Warikke-Briggs, said the development, notwithstanding, the insurance industry remained one of the greatest beneficiaries of the Local Content Act, signed into law by President Goodluck Jonathan in 2010.

    She told The Nation that through the local content law, the government is seeking improved standard of living of the citizens and higher revenue to government from company and personal income taxes. She added that the resultant economic growth therefrom, would be in form of increased production of goods and services, higher industrial capacity utilisation, direct and indirect employment generation, as well as improved commercial and trading activities.

    The NCRIB boss called on the government to encourage the participation of more brokers in NNPC insurance since the business is of high volume.

    He said: “One cannot say the reduction is healthy looking at the Local Content Act. They have the right to appoint; it is only the government that can decide if what they have done is in order. Ideally, they should have accommodated more brokers given the volume of money involved in the business.”

    He noted that to meet the 70 per cent engagement provided for by the Local Content Act, brokers who were denied opportunities in the past have strengthened their operations.

    He said only 34 of 572 brokers were appointed for the business last year, adding that though the number was low, it created opportunity for the brokers to acquire knowledge on the workings of the oil and gas business.

    “Years past, it used to be Lloyd of London that handled the account and repatriated all its gains, leaving the Nigerian economy high and dry. That is now history because the Local Content Law has effectively put paid to that, Mrs. Warikke-Brigs, said.

    Suing for the appointment of more indigenous brokers to handle the account, Oguntade argued it would boost the industry’s capacity for growth.

    He said local underwriters have a very good share of the market. “We are looking at 70 per cent as stated in the law, that means that the 70 per cent premium that used to go outside the country in the past, now hasve to be with local underwriters.

    “This would enable underwriters to improve their capacity, training, source good rates and observe their corporate social responsibilities.