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Tag: NAICOM

  • Expert advocates raise in capital requirements for microfinance banks

    Expert advocates raise in capital requirements for microfinance banks

    The Chairman of Enhancing Financial Innovation and Access (EFInA), Miss Modupe Ladipo, has advised Central Bank of Nigeria (CBN) to raise capital requirements for microfinance banks to drive financial inclusion.

    Ladipo gave the advice at the Accion Microfinance Bank Financial Inclusion Conference held on Saturday in Lagos.

    The News Agency of Nigeria (NAN) reports that the conference had the theme: “Making Financial Inclusion a Certainty in Nigeria by 2020’’.

    The year 2020 Financial Inclusion targets to provide universal financial access to all working age adults by 2020.

    According to the EFInA boss, although more than 50 microfinance policies have been formulated to drive financial inclusion, a research conducted in 2016 shows that 41.6 per cent of Nigerians are financially excluded.

    “In 2008, research conducted by EFInA revealed that about 53.5 per cent were financially excluded but CBN monetary policies such as mobile money transactions, agency banking system and micro insurance reduced it to 29.1 in 2014.

    “ But as at 2016, the percentage of the financially excluded shot up to 41.6 per cent.’’ she said.

    She claimed that the National Insurance Commission (NAICOM)’s micro insurance policy had not impacted much on financial inclusion.

    The microfinance expert said that there was an urgent need for CBN to increase capital requirements for microfinance banks so that more Nigerians could be brought into the financial net through micro finance.

    “How many Nigerians will benefit from N20 million capital requirement for unit microfinance banks?’’ she asked.

    The Managing Director of ACCION Microfinance Bank, Mrs Olubunmi Lawson, said that the bank would continually drive financial inclusion using digital process.

    She said that the bank had granted N6 billion loans to 169,000 customers since it was established in 2006.

    “The bank also has 60 branches including in seven states.”

    NAN reports that Accion Microfinance Bank was established to economically empower micro-entrepreneurs and low income earners by providing financial services in a sustainable, ethical and profitable manner.

  • Pension: FG, stakeholders faults bill seeking to exempt paramilitary personnel

    Pension: FG, stakeholders faults bill seeking to exempt paramilitary personnel

    The Federal government has opposed the exclusion personnel of paramilitary services from the Contributory Pension Scheme (CPS) as proposed by a bill in the House of Representatives.

    The government balked at the proposal of being responsible for the pension liabilities of personnel of anti-graft agencies and para-military services.

    For emphasis, the Federal Government has issued a White paper prohibiting all Ministries, Departments and Agencies (MDA) as well as paramilitary from pulling out of the CPS to Defined Benefit Scheme (DBS), it was revealed.

    The Speaker of the House of Representatives, Yakubu Dogara and others stakeholders Thursday at a public hearing on two pension-related bills warned  that to erode the gains of CPS that has over N6.4 trillion in its pool would attract avoidable consequences.

    One of the bill seeks to amend Pension Reform Act, 2014, to exclude/exempt personnel of various paramilitary and anti-graft agencies from CPS, while the other was  for an Act to amend the provisions of the Pension Reform Act, to reposition the contributory pension scheme for effective service delivery.

    If the exemption bill, sponsored by Oluwole Oke, who is also Chairman, House Committee on Public Procurement is passed into law, the Federal Government will take responsibility for the payment of 100 percent pension for personnel of Nigeria Police Force; Security & Civil Defence Corps; the Nigeria Customs Service; Nigeria Prisons Service; Nigeria Immigration Service; Economic & Financial Crimes Commission; Independent Corrupt Practices Commission; Nigeria Drug Law Enforcement Agency.

    In his presentation, Roy Ogor, from Office of the Secretary to Government of the Federation (OSGF), who spoke on behalf of Federal Government, noted that provisions of the exemption bill is not in the interest of a sustainable pension programme for the country.

    Saying that the bill should be discarded, Ogor opined that the National Assembly should not encourage legislations that would further compound the socio-economic challenges facing the country.

    According to him, the Federal government would prefer the lawmakers strengthen the Pension Reform Act that has provision for increase in pension contribution by employers rather than the proposed amendment which seeks to exempt paramilitary personnel.

    While he stressed that the government is only desirous of maintaining the extant arrangement, Ogor said public and private employers should be encouraged to meet their 18 percent pension obligations as provided in Pension Reform Act, 2014.

    He however complained that public and private employers are currently struggling to comply with the current contribution of 18 percent as the lingering economic recession affect both public and private employers.

    Nigerian Employers Consultative Association (NECA) advocated for introduction of ‘closed pension scheme’ for the paramilitary rather than outright exemption which he noted is detrimental to the well-being of the personnel of various paramilitary agencies.

    According to NECA, the implementation of the DBS as proposed by the bill would be jeopardized as government cannot afford to wholly fund the pension of the paramilitary personnel due to inadequate funding.

    The National Insurance Commission (NAICOM), the adviser to Federal Government on insurance matters, disclosed that the CPS has paid N180b annuity as at March 2017 thereby deepening the development of insurance in the country.

    Earlier, Speaker Dogara warned against any attempt to destroy the legacy achieved through the contributory pension scheme.

    Represented by the Chief Whip, Ado Doguwa, the Speaker said, “We are conscious of the fact that the pension industry has become a crucial sector that is playing a formidable role towards the development of the economy in terms of availability of huge investment funds of about N6.4 trillion provided by the scheme that could be deployed both in the real sector as well as in the capital market sector.

    “Furthermore, the role effective pension administration plays in the general well-being of the pensioners cannot be over-emphasised and we as a parliament will always ensure that the efforts of those that labored for the fatherland will always be appreciated through regular and timely payment of pensions and gratuities.

    “Any bill therefore that can improve both ends of the sector, that is, the pensioners’ wellbeing as well as the administration of the funds will always be favourably considered by the House.”

     

  • NAICOM to sack insurance CEOs, brokers for non-payment of claims

    NAICOM to sack insurance CEOs, brokers for non-payment of claims

    The National Insurance Commission (NAICOM) will remove the chief executive of any insurance and broking firm who fails to pay genuine claims, the Commissioner for Insurance, Mohammed Kari, has said.

    He gave the warning at the  Professional Forum of the Chartered Insurance Institute of Nigeria (CIIN) held in Abeokuta,  the Ogun State capital.

    Kari listed other issues for which CEOs could be sanctioned to include their companies’ inability or refusal to settle inter-company balances.

    These, according to him, have risen to an unacceptable level where the commission is required to withdraw the self-regulation option given operators to apply the big stick.

    He said the commission was alarmed by the incessant complaints of failure of insurance companies to settle genuine and discharged claims to policy holders.

    He said the commission had  received requests from claimants to apply the companies’ statutory deposit to settle discharged claims as stated by law, and that the process had started.

    Kari said: “And as a punitive measure, we have agreed to also publicise any company whose deposit is so applied and to have the chief executive of such company discharged.

    ‘’For all intermediaries who are brokers and insurance agents that hold back clients’ and companies’ money or collude to steal or corruptly operate, such actions being criminal, would be forwarded to the appropriate law enforcement agencies.’’

    He said the commission’s visit and meeting with the Economic and Financial Crimes Commission (EFCC) would enable them to establish a joint taskforce to, among other things, ensure corruption is weeded out of the insurance sector.

    CIIN President Mrs. Funmi Babington-Ashaye, while speaking on the theme of the forum, “Solvency, stability and growth-exploring possibilities,”  chosen to draw attention to some of the critical challenges facing the industry, said they could evolve strategic solutions for the industry.

  • NAICOM to restructure industry

    NAICOM to restructure industry

    The National Insurance Commission (NAICOM) will in four weeks release at least eight new restructuring and market documental policies, the Commissioner for Insurance, Mohammed Kari, has said.

    The Commissioner, who made this known during a meeting with the Nigerian Stock Exchange (NSE) and insurance operators, said the Commission would consult the operators.

    He said the Commission would release a draft of many policies, noting that it would be for the betterment of the industry.

    He said the NSE Chief Executive Officer, Oscar Onyema, had made presentations to the Commission on how they think insurance companies’performance on the floor of the stock exchange can be improved.

    He said the Commission would adopt the NSE’s proposals

    He said: “We have adopted his presentation as a working paper of the Insurers Committee and we are going to have a Subcommittee to dissect it and come up with how we can ensure that our members that are quoted play their role and members that are not quoted see incentives on what he has presented to make them come to the floor of the exchange.

    “We have made efforts to entrench transparency in the sector and we hope that the reality of the partnership with the stock exchange will be a game changer for operators.”

    On issues that have not allowed proper growth in the industry, Kari said: “We make ourselves special because we feel we are special. Otherwise anybody who has been in this industry for 25 years will remember insurance companies in this country used to own banks. They use to own investment in the stock exchange and owned even the premises of the stock exchange. Those were the days when we were not special. We looked at ourselves as insurance companies that provide services and we invest our funds where we should invest it.

    “Suddenly, we started thinking we are special. Every time a rule is made in Nigeria to better the sector, a player will object it. We lost it from the day when Technical committee on privatisation and commercialisation dictated that all institution must increase their capital and the banks we used to own capitalised much higher than us. We rather went to court challenging it and that was where we lost it. And we still haven’t gone as half as others have gone. When Risk-Based Supervision came, we still said we are special. We have been dragging our feet when other sectors have reached five per cent. The solvency policy is not waiting for us. Others have already gone ahead and we are yet to start.

    “I want to assure operators that we have quite a few programs that we will be embarking upon.  Within four weeks we are going to call out at least eight new restructuring policy, market development policy which will be in consultation with the operators. We will release exposure drafts, many policies, too many for you to have good Christmas but you should be ready for it. They are all for the betterment of what we do.”

    Onyema said the Exchange, NAICOM and with other regulators in the financial sub-sector were working to harmonise account submission procedures.

    He said this was expected to relive operators from sanctions of late submissions of accounts.

    He added that financial reporting is highly essential to investors as it aids their investments decisions.

    “We are not happy when a company has an infraction. We actually celebrate companies that have no infraction so it doesn’t give us joy to punish a company. We would rather love if that wasn’t the case.

    “We think that we can have better perception of insurance companies that can deepen penetration of provision of insurance services. Right now there are about 3.5 million users of insurance in the country for a country of 180 million. So, the opportunity to have deeper penetration is greater.

    “The use of data technology and other things that we can do to really improve the state of the insurance sector are some of the things we have proposed to them. As part of strate gies risk management, via securitisation has been recommended,” he added.

     

  • NAICOM queries two firms

    NAICOM queries two firms

    Regulator of the insurance sector, the National Insurance Commission (NAICOM) says it has queried the 2016 financial reports of two insurance firms submitted to it while eight others are being review.

    Of the 49 reports the regulator received, 39  were approved.

    Its Head, Corporate Affairs,  Mr Rasaaq Salami, explained in a statement yesterday in Abuja that the reports of Nigeria Reinsurance Corporation and KBL Insurance Ltd were queried.

    He listed the firms which have their reports under review to include Guinea Insurance, African Alliance Insurance, Nigeria Agriculture Insurance Cooperation, Equity Assurance and Capital Express Insurance

    Others include, Universal Insurance, SahamUnitrust Insurance and UNIC Insurance Plc.

    Salami, however, said FBN Insurance, Wapic Life, Ensure Insurance, Continental Reinsurance, Zenith General Insurance, Zenith Life assurance and Consolidated Hallmark, Custodian and Allied and Custodian Life Insurance financial reports were approved.

    Others with financial reports approved include Law Union and Rock, Wapic General, AIICO Insurance, AXA Mansard, Prestige Assurance, Nem Insurance Plc, Regency Insurance Plc, Lasaco Assurance, UnityKapital Assurance, Cornerstone Insurance and Fin Insurance Plc.

  • NAICOM approves STI 2016 accounts

    Sovereign Trust Insurance (STI) Plc has got the nod of the National Insurance Commission (NAICOM) for its 2016 audited financial statements.

    This was contained in a statement by its Head of Corporate Communications & Brand Management, Segun Bankole, who noted that a lot of corporate organisations and financial Institutions in Nigeria confirmed that 2016 was a difficult one for business owners and operators alike with attendant challenges, and amidst a recessed economy that is yet to abate.

    According to him, despite the harsh operating environment during the year, the underwriting firm grew its balance sheet size from N9.2 billion in 2015 to N9.5 billion in 2016. Although there was a downward shift in the Gross Premium Written when compared to the same period ended December 31, 2015. The company ended the year 2016 with a Gross Premium Income of N6.3billion as against N7.1billion in 2015 reflecting revenue shortfall of about N732 million.

    The company, according to him, showed considerable signs of resilience in some aspects of its operations, which to many in the Industry, portend a promising future for the firm as its investment income grew from N214million in 2015, to N281million in 2016.

    As a result of the company’s effective claims administration, claims payment in 2016 reduced from N1.5billion in 2015, to N1.4billion in the year under review. The total comprehensive income for the year net of tax, rose from N19million in 2015 to N186million in 2016. Its profit after tax, however, reduced from N557million in 2015, to N23million in the year under review.

    He said shareholders of the company can begin to look forward to a brighter future ahead as the murky economic situation that pervaded operations of most corporate organisations in the country is beginning to clear.

  • AXA Mansard praises NAICOM

    AXA Mansard praises NAICOM

    The Chief Executive Officer of AXA Mansard Insurance plc, Mrs. Yetunde Ilori, has commended the National Insurance Commission (NAICOM) for its effective regulatory functions that has helped raise the standard of operations in the nation’s insurance industry and also maintain integrity by industry operators.

    Speaking at the company’s 25th Annual General Meeting held recently in Lagos, Mrs. Ilori, noted that NAICOM was established to ensure effective administration, supervision, regulation, monitoring and control of the business of insurance in Nigeria. In addition, they protect insurance policyholders and the insurance industry and they have fared well, this is manifest by the performance and growth indices recorded across the industry.

    Responding to comments and enquiries by some of its shareholders regarding the level of support it enjoys from the regulatory body with regards to its operations and growth, Mrs. Ilori noted that, “NAICOM, in administering its regulatory functions, has shown commitment at ensuring that Insurance companies operating in the country are financially sound and honour their obligations towards policy holders”.

    Pleased with the result declared at the meeting, the shareholders commended the board and management of the company for the results. “We commend the resilience of the board and management of AXA Mansard Insurance for recording growth in virtually all the performance indices. We equally appreciate the five kobo per share dividend declared and encourage you to do more in subsequent years”, they said.

    The Chairman, AXA Mansard Insurance, Mr. Olusola Adeeyo, while presenting the company’s 2016 financial result said the company recorded a 25 per cent increase in gross written premium from N16.6 billion in 2015 to N20.7 billion in 2016. He also noted that net premium income of the company grew from N9.9 billion in 2015 to N10.9 billion, while profit before tax rose by 50 per cent from N2.02 billion to N3.1 billion in 2016.

    He said: “In spite of the adverse economic situation experienced in 2016, we had a successful business year with growth in almost all measures of performance. We performed even better as profit after tax went up by 63 per cent to N2.7 billion from N1.7 billion in 2015. Our balance sheet remained robust in 2016, experiencing moderate growth of seven per cent in total assets to N55billion from N51.21 billion in 2015.

    The company he noted, has vision to be the leading African financial services provider, delivering superior solutions to our customers while exceeding stakeholders’ expectations.

     

  • NAICOM: so far, so good

    NAICOM: so far, so good

    Government’s general attitude to insurance has improved in the past two years, Commissioner for Insurance, National Insurance Commission, Mohammed Kari, has said.

    Under President Muhammadu Buhari’s administration, the NAICOM-  Help Desks at Ministries, Departments and Agencies (MDAs) have been functional, and the regulator has ensured that government’s  assets are fully insured and comply with compulsory insurance law.

    The Commission also started the enforcement of public building insurance, forged strategic alliance with the Securities and Exchange Commission (SEC), Central Bank of Nigeria (CBN), Federal Fire Service among others to deepen insurance penetration.

    The Commission also extended its scope of regulation on operators and rolled out the agenda and expectation of the Federal Government on the sector.

    Kari in a document to operators in January, highlighted regulatory and supervisory priorities of the Commission for the year and sought to acquaint insurance institutions with the issues which will receive special regulatory attention in the year.

    These include Market Development, Capital Verification; Management Expenses of Insurance Companies; Statutory Returns; Risk-Based Supervision; Information Technology; Competence of directors, Senior Management and Persons in Control Functions; Corporate Governance and Service Delivery by the Commission.

    He said this will enable the institutions prepare for the changes that may be required, saying this is without prejudice to right of the Commission to prioritise any issue it considers appropriate during the course of the year.

    Kari said the recession, and other dynamic business drivers, including improvements in best practices and standards and peculiar conditions of the Nigerian insurance industry, have created the need for high level of prudence, innovation, proactivity, and agility in both operations and regulations of the Industry.

    He said: “While insurance institutions need to take steps to minimise, if not avoid, the negative impact of externalities and ride on opportunities inherent in them, the regulator needs to ensure that customer protection and market stability receive, priority attention.

    “There is no doubt that the industry is going to continue to experience its share of the current economic challenges. The Commission recognises the need to be innovative  in its supervision of the institutions and would be so guided appropriately. It however, expects that the avenue provided by Insurers Committee will be fully exploited to progressively improve the Insurance Industry’s contribution to the real economy in the manner and scale expected by stakeholders.”

    Kari said that there is low patronage of insurance by government and its agencies and the lack of effort to protect public assets.

    “Even when it does, the funding is haphazard. It is common knowledge that the ability of government to replace damaged or lost asset is not as sound as it used to be as such insurance is the best alternative to no protection at all. Employees, especially our gallant forces fighting in security challenges need to have the comfort of insurance protection as they confront their duties. There is an apparent lack of insurance expertise in the civil service as such government is not guided properly internally as it ventures to deal with the industry. The position of insurance is virtually non-existent in the civil service’s scheme of service, for the few insurance professionals are not placed properly to play their professional role.

    “The industry has been yearning for a review of the Insurance laws in the country, to these end an insurance bill was drafted and submitted to the Ministry of Finance with the full involvement of all stakeholders. Almost five years later nothing has been heard of it. We strongly solicit the Minister to see to the process and enactment of this law to enable the industry play its rightful part in the developmental programmes of the government.

    The President of Nigerian Council of Registered Insurance Brokers, Mr. Kayode Okunoren, said the government’s efforts on ease of doing business was good for the industry.

    “We appreciate the initiative of the Federal Government in its efforts in creating an enabling environment for business operations in Nigeria. The Presidential Committee on Ease of Doing Business has the onerous task of dismantling all inhibitions against business initiation and growth in the country.

    “While the Committee is already engaging strategic stakeholders in working out the modalities, it is the belief of the Council that the insurance industry should be involved in the process in view of its pivotal place in business development.

    “As we are all aware, business growth must definitely come with risks which require professionals to handle and manage.

    ‘’Notwithstanding, the NCRIB will always seek ways to make contributions towards this loft initiative that is capable of ensuring a robust business growth and survival of our national economy,” he added.

  • NAICOM to release revised RBS guidelines

    NAICOM to release revised RBS guidelines

    The National Insurance Commission (NAICOM) may release a revised priority guidelines on Risk Based Supervision (RBS) for insurance operators this week.

    Commissioner for Insurance, Mohammed Kari made this known to reporters at the just-concluded African Insurance Organisation (AIO) Conference in Kampala, Uganda.

    Kari said the Commission had commenced migration of the insurance sector into the RBS regime when it introduced Enterprise Risk Management (ERM) and Code of Corporate Governance guidelines, among others.

    He said the Commission was set to conduct one of the principal programmes in the RBS regime which is the mandatory training for directors of insurance firms. According to him, the training is billed to commence this Thursday.

    He said: “We have since commenced migrating the sector into a RBS regime by the guideline we gave by the ERM and code of corporate governance. These are risk based. The only thing we have not come out with before is one of the principal programmes in the risk based, which is the mandatory directors’ training. This will hold on June 1 and 2.

    ‘’These are programmes for risk based and the training is to show that it has already started. Priorities guidelines have been reviewed and copies will be released to the operators on Monday (today).

    By the guidelines rolled out by NAICOM, the model will require the classification of assets of the insurance companies to ascertain their capabilities to underwrite various risk portfolios in the industry.

    Earlier, the commission launched the sensitisation to educate operators on the need for a switch from rule-based regime to risk-based supervision for insurance to play effective role in the economy.

    The Commissioner explained that consolidation does not mean just an additional capital, it may be redefined as the type of insurance business the companies want to operate.

    “Today, we have capital as the only basis for operation and if you meet the minimum capital, you can operate. For instance, underwriting any cover without consideration to the obligation to stakeholders and that is why we have infractions in the industry, explaining why we have many players in the industry that do not add value to the services they provide both in the intermediary and insurance sectors.’’

    “For companies to underwrite risk, they must have enough assets to cover the risks being underwritten. So, risk-based is being able to identify what is your financial capability. If your financial capability does not guarantee you to insure oil because of the huge capital layout involved in terms of obligations, you will not be allowed to insure the risks.”

  • Insurers’ N300m rebranding project stalled

    Insurers’ N300m rebranding project stalled

    Indications have emerged that Insurers’ Committee comprising the National Insurance Commission (NAICOM) and Chief Executive Officers (CEOs) of 58 insurance companies cannot raise N300 million for the industry’s rebranding project aimed at deepening insurance awareness and penetration.

    The cash was meant to fund the project for massive insurance education and awareness across the federation.

    However, The Nation learnt that lack of commitment to the fund by most insurance companies who  are expected to commit a minimum of N5 million each has stalled the project.

    The project billed to begin last October could not do so, hence the commencement date was shifted to the first quarter of this year. The first quarter is ending yet nothing has happened.

    The Nation learnt that the project was stalled owing to disagreements among CEOs and NAICOM over sharing formula for the required fund. While the chief executives want 50 per cent of the funding to come from NAICOM as the regulator, they also want to share the remaining 50 per cent based on the Gross Premium Income (GPI) of each company, of which some of them disagreed.

    One of the CEOs who spoke with The Nation, under the condition of anonymity, said they cannot just contribute N300 million without help from the regulator.

    He said: “We have agreed to rebrand the industry to engender growth and I believe we will do it but we cannot bring out money just like that. We need NAICOM’s support.

    “The other challenge that we have is that the smaller companies are saying we cannot all share the money equally.They want the big companies to contribute more while some of the big companies think otherwise.

    “But basically, we want NAICOM to bring at least 50 per cent of the money. We told NAICOM that if we deepen insurance and expand the industry, it will increase the one per cent insurance levy we contribute and the gains will indirectly go back to them.”

    Other companies further revealed that they are yet to commence the process of releasing their portion to the fund.

    Chairman of the Insurer’s Committee on publicity, Oye Hassan Odukale, said the first phase of the multi-million Naira project will utilise the online medium such as Facebook, Twitter, among other online platforms to create awareness on the need to subscribe to insurance products and services following the rapid increase in the number of Internet and online users in the country.

    Odukale, who is also the Managing Director, Leadway Assurance Limited, added that this would later be followed by jingles on broadcast media, while also utilising the print and bill board mediums.

    A senior official of NAICOM told The Nation that the CEOs appealed to the commission to help contribute 50 per cent of the fund which it assented to but the commission in return asked the operators to first contribute their share of 50 per cent.

    According to him, the commission has always supported the operators in the industry. “We have always supported the operators in the industry. For instance, we have been advertising and creating publicity for compulsory insurances which are their products. They are supposed to market and publicise the products but we are helping them to do so committing huge funds towards advertisement. We told them that we want to see their commitment first. We had this agreement at the last Insurer’s Committee meeting in October last year and they agreed they will do the sharing.

    “But they have not been able to even agree among themselves. I remember they said 50 per cent will be shared on equal basis and the other 50 per cent will be shared based on GPI of each company. We think this is fair but some of them still do not see it that way.

    “Based on the budget that was agreed with consultant that help them calculate how much will be required for the project, each company will spend N5 million. Is that too much to spend on publicity? Some are complaining of recession, lack of business, among others. It is sad because some of them just don’t want to do anything. They prefer to remain in their comfort zone even if it means for the industry not to grow farther than where it is today,” he noted.