EXPERTS have called for the enforcement of the compulsory insurance scheme to attract more people to it.
Speaking with The Nation on the issue, the Managing Director of Royal Exchange Prudential Life, Wale Banmore, said one way to make Nigerians accept the policy is by strict enforcement.
He said one of the biggest problems confronting the industry is lack of enforcement, adding that it is through it that people will know insurance and appreciate it when they see its benefits.
“When you make a law that any employer with at least five workers must have a group life policy for the workers so that if something happens their family members are not stranded, you must enforce it to make it work. In Nigeria, most employers with more than five workers refuse to obey the law because they know nothing will happen to them since the government is not enforcing the law.”
He said if an employer knows that if his staff member dies and there is no group policy coverage and the wife or a family member of the deceased cries to the Ministry of Labour or Nigeria labour Congress secretariat, or any such identified government agency to make a report, such employers will sit up, but unfortunately, enforcement is lacking.
Banmore said if the employer or business owner knows that he will be punished if he disobeys the law, he will obey it.
“What happens in most cases is that after the death of a staff member, the business owner, or employer will give to the widow, or the family of the deceased, pay may be N50,000 and everything ends there.
‘’But if he knows that the government will stand up for the bereaved and he may be asked to pay to the bereaved up to N5 million to N10 million, apart from other stringent punishments, which might include a prison sentence, the employer will pay the insurance cover to insure his workers instead of taking the punishment.
‘’In most instances the world over, those who insure do so because they do not want to offend the law and face the punishment. This is the situation worldwide, but where there is no enforcement, the situation gets worse as it is in Nigeria.
“Nobody pays insurance for the fun of it, they pay because they don’t want to go against the law and, subsequently, face the penalty which is usually very heavy,’’ he said.
Banmore decried lack of enforcement and that is why insurance penetration is still shallow, he observed. He said the world over, people pay for insurance because in those places, the law is strict.
Publicity is another problem the Prudential chief identified. He said NAICOM has been trying to let people know the benefits of insurance.
He claimed the government is the greatest problem in the industry because it cannot enforce the policy.
The Managing Director /Chief Executive Officer , Union Assurance Plc, Mr Godwin Ejembi Odah, said NAICOM was working hard to ensure the development of the policy.
He noted that NAICOM was collaborating with the government and other agencies because implementation requires joint effort.
According to him, for people to embrace the subject, they need to see the benefits of the policies. He said NAICOM and the insurance firms were working to ensure that they enlighten the people, adding that the policies were not meant for the benefits of the industry alone, but also for the public.
President of Risks Surveyors’ Association of Nigeria (RISAN) Mr Jacob Adeosun said insurance must work because people are performing one activity or another to achieve certain goals.
“People are confronted with risks, which prevent them from achieving their goals. Some of the risks could result in financial loss directly or indirectly”.
Insurance, he added, is a mechanism to provide financial compensation in the event that an insured risk occurs and results in financially quantifiable loss.
He said: “Insurance helps insured individuals and firms to recover from impacts of insured losses e.g. fire, flood, robbery, business interruption etc. It gives peace of mind.”
Adeosun said many individuals and businesses could not survive the huge losses inflicted by fire or flood due to lack of insurance and funds.
“Children can conclude their education with insurance fund in the event of sudden death of their breadwinner. People and businesses in developed nations do not joke with insurance. It is because of the innumerable benefits they derive from it,” he stated.
Adeosun said compulsory insurances are okayed by law are in the interest of the public. How does an ordinary member of the public killed or injured by a vehicle on the public road get compensated? How will the people injured or killed in collapsed hotel, church, mosque, cinema theatre (public places) be compensated without compulsory insurance in place? he asked.
The Managing Director and Chief Executive Officer of Mutual Benefits Life Assurance Limited, Mr Femi Asenuga said the public should be enlightened on the benefits of insurance, noting that there are penalties for non-compliance which should be enforced.
He advocatd a monitoring team that would ensure compliance. He observed that compliance was usually good because corporate bodies were more aware of the need to take up these policies.
