The Nation Newspaper

Tag: NAICOM

  • Practitioners lament exclusion from National Conference

    Practitioners lament exclusion from National Conference

    The exclusion of insurance practitioners from the National Conference is an error, a former member of the House of Representatives and Managing Director, Leverage Insurance Brokers Limited, Lanre Laoshe has said.

    He told The Nation that the inclusion of members of the Nigerian Union of Road Transport Workers (NURTW) and the exclusion of his colleagues was an aberration.

    According to him, insurance is Item 33 in the Second Schedule Part 1 in the exclusive legislative list of the 1999 constitution and has been in previous constitutions.

    He added that Item 49 of that list says National Assembly will designate professionals and if it has passed two legislations, which is the 1993 and 2003 Insurance Act and is adopted by the Chartered Institute of Insurance of Nigeria (CIIN) and the Nigerian Council of Registered Insurance Brokers (NCRIB), it means the Legislature designates these bodies as professionals.

    He said: “The Nigeria Labour Congress has 12 members and the Institute of Chartered Accountants of Nigeria (ICAN) and Association of National Accountants of Nigeria (ANAN) have two members. Yet, insurance professionals are excluded. This is an indication that the government does not understand the role insurance play in the modern economy. It is even more disheartening that the NURTW members are more recoginsed than professionals like us.

    “I don’t understand what has happened and I think it’s a tragic error and I believe the government must begin to recognise us as a major economic group. Insurance practitioners are conservative and quiet because of the nature of the business which includes risks. We don’t like to talk too much because the security and assets of people are with us. But our silence should not be misconstrued,” he said.

    Similarly, the Chairman, Nigeria Insurers Association (NIA,) Mr. Remi Olowude, who also decried the exclusion of his colleagues from the conference, regretted that the industry is relegated in national discourse.

    He said there are daunting challenges that have continued to stifle growth in the sector, noting that the obstacles have been responsible for its abysmal contribution to the nation’s Gross Domestic Product.

    He said: “The challenges, perhaps, explain why the industry is not deemed worthy of representation at the upcoming National Conference. The situation is regrettable, to say the least, and must not be allowed to happen.

    “We believe that with the support of the new Board Members of the National Insurance Commission (NAICOM), chaired by Hon Prince Chibudom Nwuche and its management and the concerted efforts of all operators, the industry would experience a reversal of this glaring omission.

    “To make this happen, it is imperative that we dust up the laws governing insurance business, many of which have become obsolete and completely out of tune with the prevailing circumstances.’’

    He added: “It is against this background that we want to appeal to NAICOM to always take cognisance of this fact in the course of its regulatory duties, so that the industry is not made to bear the brunt of inappropriate legislations.”

     

  • Insurers tackle aviation agencies on encroachment

    Insurers tackle aviation agencies on encroachment

    • Urge NAICOM on challenges

    Insurers have criticised moves by the Nigerian Civil Aviation Authority (NCAA) and other government agencies under the Ministry of Aviation to provide insurance to passengers and public liability for nuclear risks.

    Describing it as an encroachment, they said this was how the health insurancce, pension and the workmen’s compensation scheme were ceded to other bodies, thereby denying the industry the right to prospect.

    The insurers under the umbrella body of the Nigeria Insurers Association (NIA), spoke through their Chairman, Mr. Remi Olowude at an interactive session between the Board Members of the National Insurance Commission (NAICOM) and some chief executive officers of insurance firms. The event was organised by the commission.

    Olowude listed the National Health Insurance Scheme, (NHIS), the National Pension Commission (PenCom) and the National Social Insurance Trust Fund (NSITF) as new bodies holding sway in businesses that should be administered by insurance firms.

    He also criticised the government’s nonchalant attitude to paying premium, restriction on investments and recognition of offshore investments, insurance of oil and gas imports, and enforcement of compulsory insurance.

    He said other issues that bother them include the gradual dominance of foreign investors in the industry, unwillingness by the government to bail out firms that lost huge assets as a result of the financial meltdown and crash of the stock market, multiple taxation of insurance firms by various tiers of governments.

    Olowude, who is also the Executive Vice Chairman, Industrial and General Insurance Plc (IGI), said  NCAA was planning to establish a fund for passengers’ liability.

    He said all over the world, aviation passengers’ liability is subject to international conventions and the risks are covered by conventional insurance policies, noting that Nigeria cannot be an exception.

    He added that the Nuclear Agency also wants to establish a fund for nuclear damage insurance, instead of seeking cover for risks, which are covered in the international market.

    Oluwode stressed the need for the government to pay premium promptly.

    He said: “The government and its agencies have been paying lip service to the importance and benefits of insurance without serious patronage and support. There is hardly sufficient budget provision for payment of premium by government and its agencies.

    “Therefore, when insurance services are patronised, payment of the premium becomes an issue, a clear negation of the provisions of the law on ‘No premium, No cover’. Some parastatals or enterprises are funded without allocation for insurance. Many insurance policies contracted by the MDAs in the past were not renewed, thus leaving the assets exposed to risk, damage and losses without protection.

    He said there was an urgent need to review the restriction on investment to ensure safe, but adequate returns to stakeholders for the viability of the industry. Investments on equities suffered losses in 2008 and 2009, yet insurers are expected to maintain the same proportionate level of investment in prescribed sectors.’’

    He called for an amendment to the provisions of Insurance Act 2003 and Regulation of insurance company investments in line with the realities of business, adding that NAICOM needs to review its position on off-shore investment for solvency calculation and actuarial valuation, which he said, is under discussion with the Commissioner and his team.

    On the insurance of oil and gas imports, Olowude said there was the need to activate the various laws relating to marine insurance of refined petroleum products imported.

    “The Insurance Act 2003, for instance, provides that all imports must be insured with an insurance company registered in Nigeria. This law is only observed in the breach. Consequently, we are seeking enforcement of the Cabotage Act 2003, review of the Insurance Act 2003 and the Nigerian Oil Industry Content Development Act 2010.

    “We have also observed the gradual dominance of foreign investors in the market. Although Direct Foreign Investment (DFI) is in the interest of the economy, we want to believe that the foreign investors are not placed at an advantage over their Nigerian counterparts. We welcome foreign investors provided that there is a level playing field for all.

    “Also, many institutions and enterprises benefited from bail out plans by their governments after the economic crises and financial meltdown of 2008. In Nigeria, the banking industry, aviation and manufacturing industries benefited from the bailout by the Federal Government. Many insurance firms are still groaning from the losses suffered as a result of the crash in the stock market.

    “Recovery has been difficult and returning to profit remains a herculean task. We appeal to the Federal Government through your good offices to look towards the direction of insurers in this regard, Oluwode added.

    NAICOM Chairman, Hon Chibudom Nwuche, said the event was aimed at providing a platform for exchange on the performance of the industry, and to brainstorm on areas requiring urgent attention for improvement and mutual support.

    He said the thrust of the Commission’s activities is to support the Transformation Agenda of the Federal Government, providing an appropriate regulatory framework for insurance institutions.

    He said the sector is a very important, and trhat it must be properly regulated to enable it to play a pivotal role in the economy.

    He said: “We are not unmindful of the fact that there are, indeed, some challenges encountered by you in the course of doing your business. But you will agree with me that while some of these challenges are certainly beyond your immediate control, a lot of the challenges are self-inflicted. So, the onus is really on you to address these challenges.

    “On our part, we will go and critically look at some of the challenges you have highlighted to provide solution to all the problems.But we will continue to resolutely support the resolve of NAICOM’s management to ensure effective supervision of the industry in order to protect policyholders and Government Strategic Assets.’’

    He continued: “While NAICOM continues to operate within confines of all extant laws, all practitioners in the sector must operate with the rules and internal norms as a means towards deepening public trust and enhancing contribution to the nation’s Gross Domestic Product (GDP).

    “In carrying out this statutory responsibility, I must emphasise that there should be no one, or group to be excluded from compliance with the rules and regulations.Indeed, there shall be no sacred cows, as nobody will be allowed to be above the laws.’’

  • 10 firms’ve significant foreign investments, says NAICOM chair

    10 firms’ve significant foreign investments, says NAICOM chair

    Ten insurance firms have significant foreign ownership as against three that had foreign interest about five years ago, the Chairman, National Insurance Commission (NAICOM), Chibudom Nwuche, has said.

    Nwuche, who made this known in Lagos at an interactive session with reporters, said more foreign investors were making enquiries on requirements for participation, adding that this was part of the outcome of the on-going transformation agenda of the Federal Government.

    He said the sector has a huge potential waiting to be tapped.

    He explained that the developmental agenda which encapsulates a wide range, but attainable developmental roadmap relating to the financial services sector, is intended to enhance the financial literacy in Nigeria and reposition the sector to play a pivotal role in the economy.

    He said NAICOM has historically implemented some regulatory and developmental initiatives that have significantly improved the conditions of the sector and enhanced its attractiveness to investors, stating that a good evidence of this is the increased number of foreign investors that have taken equity interests in firms.

    He noted that the strategic goals of the governing board under his leadership is deepening insurance penetration by sensitising the public.

    “In addition to the on-going efforts to facilitate compliance with the laws on compulsory insurance, we are committed to ensuring the successful implementation of the Financial Inclusion initiatives, such as Microinsurance and Takaful insurance, saying that once completed, it would bring about increase in job creation, accessibility of Nigerians to the benefits of insurance and contribution of insurance to the national economy.

    Nwuche said the Board will support NAICOM in ensuring the maintenance of adequate level of capitalisation, implementation of the Risk- Based management Framework for the sector; continued compliance with International Financial Reporting Standard (IFRS) to sustain the integrity of insurers financial reports; compliance with all relevant laws and regulations, as well as the implementation of the ‘No Premium No cover Policy.’

    He said the Board would enhance NAICOM’s regulatory capacity and oversight through manpower development and effective performance management system, as well as ensure appropriate deployment of information and communication technology infrastructure for the effective discharge of the Commission’s oversight functions.

    He added that they would also work towards the passing of the Insurance Bill, conduct regular interaction and stakeholder panels to exchange views and optimise revenue collection and effective management resource.

  • Lagos Fire Service kicks over non-payment of 0.25% revenue

    Lagos Fire Service kicks over non-payment of 0.25% revenue

    • Insurers fault law

    The Lagos State Fire Service has accused underwriters of not paying the mandatory 0.25 per cent revenue to the Nigeria Fire Service by way of Fire Service Maintenance Fund (FSMF) as required by the Insurance Act.

    The state’s Fire Service Director, Rasaq Fadipe, who spoke at the just concluded member’s evening of the Nigerian Council of Registered Insurance Brokers in Lagos, said the money which is meant to be paid quarterly by insurers, is meant to motivate firemen to be effective in firefighting.

    Section 65 (4) specifies that 0.25 per cent of the premium collected is to be paid into a Fire Services Maintenance Fund to be administered and disbursed by NAICOM for the purpose of providing grants or procurement of equipment to institutions engaged in firefighting services in the country.

    This section emanated from Section 64, which makes mandatory the insurance of buildings under construction where more than two floors are envisaged. The insurance must cover the liability of the owner of the building in respect of the negligence of his servants, agents or consultant.

    It is also followed by Section 65 which makes the insurance of public building mandatory. Public buildings are defined in Section 65(2) of the Act.

    Fadipe urge insurers to comply with the law adding that their members need to be encouraged.

    Managing Director, Niger Insurance Plc, Mr. Kola Adedeji who delivered a paper on public buildings, said insurers have too many commission and levies to pay to different organisations and this has been affecting their businesses.

    Adedeji stressed that while the fire service business is not something that should be toiled with, insurance business has to be profitable for them to be able to pay.

    He said: “Insurance business profits on law of large number. But with the way the business is now, if we pay .25 per cent to fire service, one per cent to our regulator, NAICOM, and 15 per cent to intermediaries like brokers, loss adjusters among others, then the premium we generate from the insuring public will be finished”.

    A broker and member of the NCRIB, Barrister Rotimi Edu added that the law on how to remit the .25 per cent due to the fire service is very big because it did not specifically state if the fund is for the fire service.

  • NAICOM urged to reduce N350m microinsurance minimum capital

    NAICOM urged to reduce N350m microinsurance minimum capital

    Insurance expert and Managing Director, RiskGuard Africa Nigeria Limited, Mr Yemi Soladoye has urged the National Insurance Commission (NAICOM) to reduce the N350 million, N200 million and N150 million minimum paid-up share capital for intending composite, General and life microinsurance operators.

    Soladoye, who is also a consultant to NAICOM on Market Development Restructuring Initiative (MDRI), said this will ensure that the objective of microinsurance initiative in the country is achieved.

    He spoke while presenting a paper at the 2013 Nigerian Insurance and Pension Award organised by Inspenonline Media in Lagos.

    He disclosed that as at February 2014, about seven commercial underwriters are providing Microinsurance products in Nigeria while some six new applications are said to have been received by NAICOM from intending standalone operators.

    He said the challenge of the microinsurance initiative is how it will be run in a manner that it does go the way that conventional insurance.

    He said: “Microinsurance is already un-locked in Nigeria through the commendable efforts of NAICOM and German Development Corporation (GIZ) and the next stage is to keep the door ajar. The challenge now is how to leave it unlocked. The Nigerian Council of Registered Insurance Brokers (NCRIB) and the Nigeria Insurers Association (NIA) are very crucial in unlocking the business.

    “Also, the N350 million required capital is on the high side. This is a major challenge and if we do not approach it in the right manner, microinsurance business will go the way of conventional insurance”.

    He also said that existing weak brokers and microinsurance bankers should be encouraged to take up the business.

    “In any case, the minimum number of Microinsurance providers required in Nigeria by 2020 is 774 i.e. one Per Local Government area. At the current rate, the regulators will have to recognize the following non-tradition operators at least as distribution channels if it truly wants to provide access to Microinsurance in Nigeria.

    “The Minimum Capital Requirement (MCR) to operate an insurance company in Nigeria is the highest in Africa. This capital increase has however not translated into geometrical premium growth since 1961 when the first MCR was stipulated as £25,000 (N3.875 million). Whereas, the industry MCR had increased by 6,250 per cent between 1976 and 2011, the Gross Premium Income had only increased by 1,230 per cent. The net result is always the death of old players and birth of new players who will later become old players. This is what puts a question mark on the huge amount of N350 million specified as the MCR for Micro insurance. A National Microinsurance Goals and Strategy Statement together with National Business Plan and Regulatory Framework should immediately be put in place by the regulator.

    “How many offices does the regulator expect an operator to open with N350 million? Are we expecting AjoseAdeogunMicroinsurance Companies? Prado Jeep and Ipad MDs, Is Microinsurance going to be the landing pad, for weak commercial underwriters. We suggest use of 5-tier operational model based on Capital Requirement to secure widest coverage of Microinsurance in Nigeria. For instance, National to remain at N350m going by Insurance Act 2003, Regional to be N90million going by 1997 Ins Act, State to be 40million going by 1997 Ins Act, LG to be N10million going by 1991 Ins Act and Unit to be N5million going by 1991 Ins Act. The unit and regional approach will reduce cost of doing business. Lean structure, modest office, appropriate location must all be specified per unit of office outlet by the regulator”, he said.

    He however noted that he believes NAICOM is a listening regulator and they will look into the challenge.

    Guideline on microinsurance earlier released by NAICOM states that any Microinsurerintending to commence a specialized Microinsurance business shall have aminimum paid-up share capital of N150 million to operate LifeMicroinsurance Business, N200 million for GeneralMicroinsuranceBusiness and N350 million to operate the Composite Microinsurance Business.

    It read: “The Commission may increase from time to time the amount of minimum paid up share capital as stated above. A specialized Microinsurershall maintain with the Central Bank of Nigeria a statutory deposit of 10 per cent of the minimum capital requirement and shall maintain adequate and valid reinsurance arrangements.

    “Micro-insurance products are specially designed for the low income earners. It requires them to pay a little premium, which in return, offers them cover in times of losses or other unforeseen occurrences.

    “The regulatory horizon was broadened and, therefore, geared towa

    In November last year, NAICOM opened up the microinsurance business to non-conventional insurers like multi-purpose Cooperative Societies, Microfinance Banks, Faith-Based Organization (FBOs), Mutual and Community Based Organization (MCBOs), Non-Governmental Organizations (NGOs), Governments and MDAs, The NHIS, Civil Society Organizations (CSO), Telcos, Utilities, Brokers and Agents. The Commission has since then began issuing of licenses to intending operators.

  • ‘Why public buildings insurance policy is failing’

    • NCRIB warns underwriters against unethical practices

    Despite efforts by the National Insurance Commission (NAICOM) to implement the insurance on public buildings under the Insurance Act of 2003, not much has been achieved in the implementation or enforcement of this provision, Managing Director, Niger Insurance Plc, Mr Kola Adedeji has said.

    Adedeji made this known while delivering a paper at the Nigerian Council of Registered Insurance Brokers (NCRIB) Members Evening hosted by Niger Insurance in Lagos.

    He stated that the launching of the Market Development and Restructuring Initiative (MDRI), which covers insurance of public building, did not yield the desired result.

    To this end, the Niger chief said a multi-dimensional approach would be necessary to tackle the challenges.

    He said that the regulator’s strategy was not working, confirmed the opinion of experts on compulsory insurance that it should be restricted to areas it is needed.

    He stressed that problems associated with the insurance of public buildings cannot be divorced from that of the industry.

    He recalled that NAICOM in one of its documents listed poor compliance culture, inadequate legislative and legal framework, poor public perception of NAICOM as a regulator and public resistance to insurance as threats to the industry.

    He said: “The Insurance Act of 2003 made provisions for a number of compulsory insurances among which is the insurance of public buildings.

    “Section 65 of the said Act states every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood. The Act defines public buildings as tenement house, hostel and building occupied by a tenant, lodger or licensee. It also includes eateries, restaurants, internet cafes, shopping malls etc”.

    He added that sanction for non-compliance with this provision is stated as a fine of N100, 000 and/or imprisonment of one year.

    He said insurance of public buildings is meant to provide an avenue for compensation to third parties and users of damaged properties, adding that all compulsory insurances, it provides a socio-economic function in the society.

    He further said: “Rather than have new compulsory insurances, such as for buildings under construction, occupier’s liability, and insurances of public buildings lumped under the Insurance Act, it would have been more pragmatic to have a separate Act of parliament for each and every one of them.

    “Each of these Acts would then provide relevant enforcement agencies though the benefits on the long run accrue to the insurance industry in form of increasing   patronage and growth. In the case of the insurance of public buildings, all states physical planning authorities should be empowered to enforce the provisions of the Act.”

    Meanwhile, the President, Nigerian Council of Registered Insurance Brokers (NCRIB) Ayodapo Shoderu,  has criticised underwriters for unethical practices.

    He said the sub-sector is endangered by the activities of some underwriters who subvert brokers on their accounts.

    He noted that what such unethical underwriters do is to go back to woo clients brought in contact with them by brokers, even when the account being covered by the company was still running.

    Shoderu said this practice is not only unwholesome, but capable of snuffing life out of brokers, with its grave implications on the national economy.

    He said the council has taken the issue up with the National Insurance Commission (NAICOM) and the Nigerian Insurers Association (NIA).

    Shoderu called on brokers to disassociate themselves from those who have been soliciting membership for a parallel broking body, stressing that the NCRIB is the only body saddled with the registration of insurance brokers.

  • Insurers underwrite 40% of local risks, says Daniel

    Insurers underwrite 40% of local risks, says Daniel

    The Nigerian Content Act has increased insurance firms capacity to underwrite local risks to 40 per cent, the Commissioner for insurance, Fola Daniel, has said.

    Daniel, who stated this in Lagos during an interactive session with reporters, said prior to the enactment of the law, the industry was underwriting about three per cent of local risks.

    He noted that the law has paved the way for underwriters to engage in special risks hitherto done overseas.

    The NAICOM boss insurers are at present doing well in the oil and gas risks, noting that tremendous growth has also been recorded on aviation risks.

    He said industry operators are careful about the level of their involvement in high profile risks, stressing that they only take a bite of what they can chew.

    He said: “The insurance sector has great potentials for massive growth. The population, if adequately harnessed, gives an added advantage to the industry to further develop its market.

    “Also, the implementation of the No Premium No Cover law, has significantly improved the cash flow of insurance companies. We are optimistic that the positive turn of events would impact on the capacity of operators to settle claims promptly.”

    He said the Commission is also working towards having a Call Centre that will enable the public report insurance firms that failed to honour the terms of contracts entered with them.

    “The insurance industry has witnessed tremendous changes in recent times owing to the new reforms embarked upon by NAICOM. These reforms include the introduction of risk based supervision, migration to International Financial Reporting Standard (IFRS) from the Nigerian Generally Accepted Accounting Principles (NGAAP), market conduct reforms, claims settlement reforms, financial inclusion and more.

    “These are all geared towards developing the industry and improving the general perception of insurance,” he added.

  • NAICOM, NLC to partner on group life

    NAICOM, NLC to partner on group life

    The National Insurance Commission (NAICOM) and the Nigeria Labour Congress (NLC) are partnering on Compulsory Group Life Insurance to protect workers.

    According to the two bodies, this will also help deepen insurance penetration in the country.

    Commissioner for Insurance, Fola Daniel made this known when he led top management of the commission on a visit to NLC President, Comrade Abdulwahed Omar in Abuja.

    Daniel listed the benefits of Compulsory Group Life Insurance under the Pension Reform Act of 2004.

    He urged Omar to ensure that his members, especially those at the state and local government levels, were insured by their employers.

    He noted that one of the cardinal functions of the Commission is the protection of existing and prospective insurance policy holders in the country.

    Omar said the NLC was willing to work with NAICOM in educating workers and the public on the benefits of insurance.

    He suggested the setting up of a joint working committee for strategic planning and implementation to the achieve desired success.

    Membership of the committee would include NAICOM, NLC and the National Pension Commission (PENCOM) to ensure greater efficiency and effectiveness. The committee is expected to be inaugurated soon, he said.

    At the meeting were the Deputy President, NLC, Comrade Kiri Mohammed; Deputy President, NLC, Comrade Issa Aremu,President, Civil Service Commission Union, President, Nigeria Union of Petroleum and Natural Gas Workers (NUPENG),Comrade Igwe Achese; and other top council members of NLC.

    Also, the Deputy British High Commissioner, Peter Carter, has led a team from Prudential Plc, a life insurance firm in the United Kingdom on a visit to NAICOM.

    He said they were in the Commision to appraise him of the intention of Prudential Plc to invest in the insurance market and to inquire about the modalities.

    The Director of Strategy & Corporate Development at Prudential Plc,  Matt Lilley, said his firm is a life insurance entity has been in operation for 165 years.

    The company, he said, has major investments in Asia and has injected $5 million into a small insurance business in Ghana.

    He said Prudential Plc is keen and eager to enter the Nigerian market for big ticket businesses.

    Daniel, who said he was excited about the visit and the desires of Prudential Plc to invest in the country, promised the support and cooperation of NAICOM to the successful entrance of the company into the market.

  • NAICOM okays Igbiti, AIICO’s MD

    NAICOM okays Igbiti, AIICO’s MD

    The National Insurance Commisssion (NAICOM) has okayed the appointment of Mr Edwin Igbiti as Managing Director of AIICO Insurance Plc.

    In a statement, the firm’s Head, Corporate Affairs Elizabeth Agugoh, said NAICOM, in a letter dated January 28, this year approved the appointment.

    Igbiti’s career spans over two decades. It has inspired AIICO’s continuous and exceptional growth over the years, ranking among the top three insurance companies in the country.

    He is a member, Nigerian Institute of Management, Chartered, (NIMC) and Fellow, Chartered Insurance Institute of Nigeria (CIIN).

    He holds an MBA from the University of Ado-Ekiti, an Advanced Diploma in Management from the University of Lagos (1997), a Certificate from Chartered Insurance Institute, London and is an alumnus of Howard University Business School, United States.

  • Anxiety over govt’s N12b premium for workers’ cover

    Anxiety over govt’s N12b premium for workers’ cover

    The payment of N12 billion premium on Group Life Insurance policy for Federal Government workers is generating confusion among the practitioners and the Head of the Civil Service of the Federation.

    This is coming just as the Federal Government has called on registered insurers and brokers for bids to underwrite the risk on life assurance cover for all its employees in the year in compliance with the Pension Reform Act 2004.

    The publication noted that the opening of bids will be held on Monday, March 3, 2014.

    The confusion, however, sprang from whether the N12 billion paid will be taken as payment of the debt accumulated by the Federal Government in 2011 and 2012 before the ‘No premium, No cover’ law took effect or for last year when the law was implemented.

    Some of the operators, who spoke with The Nation on condition of anonymity, said discussions are ongoing to settle the matter.

    The law, according to the National Insurance commission (NAICOM) stipulates that insurance will only be sold on a cash and carry basis and underwriters are to reject risks that would have occurred prior to when premium is paid.

    An operator expressed worry over the workings of the group life insurance for workers.

    He confirmed that the money which is about N12 billion was paid in December and was stated by the Federal Government as premium for 2013 and 2014.

    He said going by the No premium, No cover policy, the Federal Government could not claim cover for its employees last year because no premium was paid throughout the year.

    He noted that part of the confusion was also because they said they would pay the backlog later in the year.

    Another broker said they were confused whether the payment is for previous years owed or for this year.

    He said: “Federal Government paid in December but the question is whether it is for 2014, 2013 or previous years owed.

    “Going by the law, no insurer can say he provided cover for them last year because the insurer will be seen to have gone against the law. Presently, discussions are going on between the Head of Civil Service and the operators.”

    The Commissioner for Insurance, Mr. Fola Daniel explained why the insurance regulator barred insurance operators from underwriting risks on credit, saying the menace of unpaid premium has been impacted negatively on the fortunes and survival of the insurance industry.

    He stated that the issue of delayed or unpaid insurance premium has now attained an alarming crescendo, threatening to drive the industry into extinction if not curbed.

    According to him, most insurance companies made huge provisions for outstanding premiums in their books on an annual basis, “which invariably affects their bottom-line and thus, their inability to make profit, pay dividends to shareholders and attract investments to enable growth.”

    He said such situation, which he said was avoidable, was unhealthy and dangerous to the industry and has to be stopped by the regulatory body NAICOM.

    With this development, it is expected that insurance companies would be posting less premium income and make no provisions for premium debts.