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Tag: NIA

  • NIA warns banks against forcing customers to patronise subsidiaries

    The Nigerian Insurers Association (NIA) has warned banks to desist from compelling customers to insure their collaterals with their subsidiaries.

    Its Chairman Eddie Efekoha gave the warning at a briefing in Lagos.

    He explained that a subsidiary is a captive company owned by a bank where, in contravention of the Insurance Act, it forces customers who obtain loans from it to patronise.

    The chairman expressed displeasure over the rising trend of banks compelling customers to do so.

    He stressed that this is against the Central Bank of Nigeria (CBN) law, which bans universal banking licence in the country, noting that clients should not be forced to insure with any insurance firm.

    He said: “It has come to our notice that the banks and their subsidiaries often compel customers to insure with themselves specific insurance companies. This means that the banks compel their customers who take loans to insure the collateral with their own insurance subsidiaries or companies.

    “Rather imposing their insurance companies on customers, the NIA chairman advised bank customer to bring a policy from any registered insurance company which notes the interest of the bank that should there be damage to this collateral, the proceeds from the insurance would be made to the bank; and, that is all that is required.”

    Efekoha, therefore, urged such customers to bring evidence of compulsion to indemnify collateral with captive companies to NIA.

    He said they had begun educating the public that where banks so insist, they should compel the banks to put it in writing and that a such letter should be brought to the NIA enroute because we will make such report to the CBN, adding that the assocaition would act on it.

    The NIA chief said the association had overlooked such complaints in the past, adding that it had got out of hand in recent times and that the association  could no longer sweep it under the carpet.

  • NIA seeks govt’s, NASS’ intervention over annuity dispute

    NIA seeks govt’s, NASS’ intervention over annuity dispute

    Life insurance firms under the aegis of Nigerian Insurers Association (NIA) have sought the intervention of the National Assembly, Secretary of the Federal Government; Minister of  Finance and the Head of Service on the issue of transfer of life annuity assets to pension funds Custodians (PFCs) as directed by the National Pension Commission (PenCom).

    According to PenCom, a total of 46,198 retirees are drawing their pension benefits through life annuity product offered by insurers while 140,532 retirees are drawing through programme withdrawal offered by Pension Fund Administrators (PFAs).

    Life Annuity and programme withdrawal are modes of withdrawal of benefits over an expected lifespan. The National Insurance Commission (NAICOM) and PenCom jointly regulate the life annuity business of the Pension Reform Act (PRA) 2004 repealed by the PRA 2014.

    PenCom on November 3, this year directed all the insurance companies interested in administering annuity to retirees to appoint Pension Fund Custodians (PFCs) of their choice and open an account with them accordingly. This generated a backlash from insurers regulated by NAICOM as they disagree with PenCom.

    PenCom explained that the decision to move annuity assets from life insurance companies to PFCs is to ensure consistency with Pension Reform Act (PRA) 2014 and strengthen the processing of administration of retirement benefits.

    PenCom in a circular titled, ‘Strengthening the Administration of Retirement Benefits under the Pension Reform Act (PRA) 2014,’ with reference number PENCOM/INSP/CIR/TECH/16/17, issued on November 3, 2016, to pension fund administrators and custodians and signed by its Head, Surveillance Department, Muhammad Umar, the pension regulator noted that in line with the PRA 2014, it resolved that the custody of retiree life annuity shall henceforth be domiciled with PFCs as provided for in Section 56 of the Pension Act.

    “Life insurance companies currently providing life annuity for retirees under the Contributory Pension Scheme (CPS) are to open an operational account jointly with a PFC of their choice and advise the commission. The life insurance companies providing retiree life annuity under the CPS should transfer the corresponding assets in their possession/custody to the PFC of their choice. The approval of new request for annuity should be put on hold with immediate effect, until life insurance companies meet the custody and transfer conditions.

    The NIA Director-General, Sunday Thomas, who spoke at the second Business Journal Insurance Summit, in Lagos, said the body had written PenCom, National Insurance Commission (NAICOM) and the Head of Service on the need to resolve the problem.

    He said PenCom lacks legal grounds to call for transfer of annuity assets, which is different from pension contributions.

    He said: “We have sought the intervention of the of the National Assembly, Secretary to the  Government of the Federation, Minister of Finance and the Head of Service on issue of transfer of life annuity assets as directed PenCom.

    “PenCom lacks legal grounds to call for transfer of annuity assets which is different from pension contributions. I am optimistic the circular would be withdrawn by the pension regulator.”

    Meanwhile, NAICOM has also sought dialogue with PenCom on its suspension of life annuity insurance payments of retirees by PFAs to insurance companies.

    NAICOM’s Head of Corporate Communications, Rasaaq ‘Salami said the commission is intervening and has called for a meeting with PenCom.

    “We are in receipt of a letter from PenCom on its suspension of annuity payment by PFAs to insurance companies. We have responded and stated our position and we have asked for a meeting with them. Since the meeting is a process that we have initiated, it will not be good for us to make our position known to the public. The annuity business is jointly regulated by NAICOM and PenCom and we must look for how to resolve whatever problem we encounter,” he added.

  • NIA seeks govt’s, NASS’ intervention over annuity dispute

    NIA seeks govt’s, NASS’ intervention over annuity dispute

    Life insurance firms under the aegis of Nigerian Insurers Association (NIA) have sought the intervention of the National Assembly, Secretary of the Federal Government; Minister of  Finance and the Head of Service on the issue of transfer of life annuity assets to pension funds Custodians (PFCs) as directed by the National Pension Commission (PenCom).

    According to PenCom, a total of 46,198 retirees are drawing their pension benefits through life annuity product offered by insurers while 140,532 retirees are drawing through programme withdrawal offered by Pension Fund Administrators (PFAs).

    Life Annuity and programme withdrawal are modes of withdrawal of benefits over an expected lifespan. The National Insurance Commission (NAICOM) and PenCom jointly regulate the life annuity business of the Pension Reform Act (PRA) 2004 repealed by the PRA 2014.

    PenCom on November 3, this year directed all the insurance companies interested in administering annuity to retirees to appoint Pension Fund Custodians (PFCs) of their choice and open an account with them accordingly. This generated a backlash from insurers regulated by NAICOM as they disagree with PenCom.

    PenCom explained that the decision to move annuity assets from life insurance companies to PFCs is to ensure consistency with Pension Reform Act (PRA) 2014 and strengthen the processing of administration of retirement benefits.

    PenCom in a circular titled, ‘Strengthening the Administration of Retirement Benefits under the Pension Reform Act (PRA) 2014,’ with reference number PENCOM/INSP/CIR/TECH/16/17, issued on November 3, 2016, to pension fund administrators and custodians and signed by its Head, Surveillance Department, Muhammad Umar, the pension regulator noted that in line with the PRA 2014, it resolved that the custody of retiree life annuity shall henceforth be domiciled with PFCs as provided for in Section 56 of the Pension Act.

    “Life insurance companies currently providing life annuity for retirees under the Contributory Pension Scheme (CPS) are to open an operational account jointly with a PFC of their choice and advise the commission. The life insurance companies providing retiree life annuity under the CPS should transfer the corresponding assets in their possession/custody to the PFC of their choice. The approval of new request for annuity should be put on hold with immediate effect, until life insurance companies meet the custody and transfer conditions.

    The NIA Director-General, Sunday Thomas, who spoke at the second Business Journal Insurance Summit, in Lagos, said the body had written PenCom, National Insurance Commission (NAICOM) and the Head of Service on the need to resolve the problem.

    He said PenCom lacks legal grounds to call for transfer of annuity assets, which is different from pension contributions.

    He said: “We have sought the intervention of the of the National Assembly, Secretary to the  Government of the Federation, Minister of Finance and the Head of Service on issue of transfer of life annuity assets as directed PenCom.

    “PenCom lacks legal grounds to call for transfer of annuity assets which is different from pension contributions. I am optimistic the circular would be withdrawn by the pension regulator.”

    Meanwhile, NAICOM has also sought dialogue with PenCom on its suspension of life annuity insurance payments of retirees by PFAs to insurance companies.

    NAICOM’s Head of Corporate Communications, Rasaaq ‘Salami said the commission is intervening and has called for a meeting with PenCom.

    “We are in receipt of a letter from PenCom on its suspension of annuity payment by PFAs to insurance companies. We have responded and stated our position and we have asked for a meeting with them. Since the meeting is a process that we have initiated, it will not be good for us to make our position known to the public. The annuity business is jointly regulated by NAICOM and PenCom and we must look for how to resolve whatever problem we encounter,” he added.

  • NIA prepares insurers for risk-based supervision

    In preparation for the implementation of risk-based supervision by the National Insurance Commission (NAICOM), the Nigeria Insurers Association (NIA) is planning a workshop to build capacity and enhance insurers’ understanding of the concept.

    This was made known by the NIA Chairman, Eddie Efekoha at a workshop on risk-based supervision in Lagos.

    Efekoha said NAICOM had begun consultations to build consensus among insurance players, noting that this is commendable.

    According to him, Alexander Forbes was at the workshop and has contributed to the development of the Nigerian insurance market and most importantly, the enhancement of the skills and competencies of NIA members in the area of risk based supervision and by extension, risk based capital.

    He said: “Risk-Based Supervision (RBS) is gradually becoming the dominant approach to regulatory supervision of financial institutions around the world. It is a comprehensive, formally structured system that assesses risks within the financial system, giving priority to the resolution of those risks.

    “Often contrasted with rules-based regulation, it is also known as principles or compliance-based supervision;  a method of regulation which involves checking for and enforcing compliance with rules and legislation, regulations or policies that apply to an entity. RBS has a regulatory emphasis of focusing on what matters,  assessing the degree of risk in the company’s business operations and determining how to reduce the risk as required.

    “With RBS, entities are always being monitored both for compliance with the rules and for how they approach risk management. This programme is intended to address some of the key issues that will help improve our understanding of the subject matter of discussion,” he said.

  • NIA charges govt on multi-level housing approach

    The  Nigerian Institute of Architects (NIA) has urged the Federal Government to look into several options to tackle 17million housing deficit of 17 million.

    During a visit to the Minister for Power, Works and Housing, Mr. Babatunde Fashola, described social housing as a model waiting for implementation.

    Its President, Tonye Braide, said the institute had developed concepts on mass housing, which proposed an executing template based on the mass production of the components required to build the houses rather than looking at the completed house.

    One of these is the social housing model. Another model looks at the provision of a property exchange mechanism,where housing is treated as an exchangeable commodity with mobility through the housing types and based on income expansion, family size and zoning typologies.

    According to Braide, this would create an architectural value chain in the production process and open access to an array of Small and Medium scale Enterprises funding at single-digit interest rates for component fabrication, which will also culminate in housing development.

    “Low cost housing will be executed along the mass production templates used in the manufacturing industry. Standardisation of components will be key and an operating logistics platform can be developed to distribute the components around a localised area network. This will result in architectural component fabrication plants in every local government area, producing everything needed to complete a basic house,” he explained.

    This, he explained, would ensure that indigenous small and medium scale enterprises (SMEs) get the basic raw materials from local components which are in abundance in local governments.

    “If each component fabrication cluster employs 100 persons, then about 75,000 new upstream jobs will be instantly created. The downstream sector will consist of the masons, carpenters and other artisans,” he said.

    The minister was quoted as saying “we must be at the forefront of resetting minds about the realities of home ownership. To achieve social housing, the money has to come from somewhere. Nigerians must accept that social housing has to be paid for,” adding that that no community had achieved 100 per cent home ownership, no matter how cheap or affordable.

  • NIA lauds Fed Govt’s N14.69b vote for Group life, others

    NIA lauds Fed Govt’s N14.69b vote for Group life, others

    The Nigeria Insurers Association has commended the Federal Government for earmarking N14.69 billion insurance premium for Group Life Insurance for its workers and assets.

    NIA’s Director-General, Sunday Thomas in an interview said the government has done well, adding that there was need for more in terms of insurance of its assets and liabilities nationwide.

    The Federal Government voted the amount for Group life for its Ministries, Departments and Agencies (MDAs) of the Federal Government, including Department of State Security (DSS), Insurance of Sensitive Assets and Corps members in this year’s Appropriation Bill passed by the National Assembly on March 23.

    According to Thomas, the amount surpasses what previous government budgeted.

    He said: “The amount surpasses what it was in the previous years. I think it is quite substantial and it should be commended.

    “The government need to secure the 2016 budget with insurance because spending without protection or security will lead to a waste of in government resources.”

    He urged the government to ensure that insurance cover is obtained by the  MDAs for the execution of both capital and recurrent expenditure of the budget.

  • NIA to sustain stability, growth through micro insurance

    The Nigeria Insurers Association (NIA) has embarked on closer interaction with the  informal sector to ensure stability and growth for businesses, its Director-General, Sunday Thomas, has said.

    He made this known while speaking at the conference/fair in Lagos. The event had market women, traders, artisans and non-governmental organisations (NGO) in attendance.

    He said that insurance is a viable tool for mitigating losses among the less privileged.

    He noted that the conference/fair is their first ever on Micro Insurance subsector and also their first deliberate effort to reach out to the informal sector of our economy.

    He stressed that the insurance industry regulator, the National Insurance Commission (NAICOM) has sets out the framework, road map, market and regulatory strategic directions for the operation of micro insurance in Nigeria.

    He said: “This conference is put together by the Micro Insurance committee of the Nigeria’s Insurers Association. Our aim is to bring together all stakeholders concerned with micro insurance in Nigeria with the overall objective of ensuring that both the demand side and the supply side of micro insurance are in sync together.

    “It is also meant to create awareness for our member’s micro insurance products for informal sector of the economy. It is common knowledge that insurance culture is very low among the informal sector and it would take deliberate effort like this to win the confidence of this sector.

    “The country diagnostic study says less than 1 per cent of the adult population in Nigeria have access to a voluntary insurance policy.  Nigeria is among the least countries in terms of insurance contribution to GDP which is around 0.72 per cent.”

    He said the sector is regarded as “a grossly untapped opportunity” because we have not yet appealed to the informal sector which constitute over 80 per cent of the Nigerian population.

    “For the NIA, the obvious way forward is to through closer interaction with this sector, intensive capacity building and greater expertise in micro insurance, providing unique micro insurance services, development of people friendly products, and improved innovative distributive system.”

    “Micro insurance is targeted at the informal sector and the low income masses. It is the most veritable too for mitigating losses from unexpected accidents and disasters.  Low income groups are invariably exposed to innumerable risks. Micro insurance works on the phenomenon of risk transfer mechanism characterized by low premiums and low coverage limits.

    “As an industry we will continually seek for opportunities to court the friendship of this sector. For us the future of our industry most probably lies in what we do with this sector and how they the sector accepts our products and services. We are optimistic that the relationship we are starting today will continue to blossom and get stronger”, he noted.

  • NIA holds micro insurance fair

    The micro insurance committee of the Nigeria Insurers Association (NIA), will on Wednesday hold a micro insurance fair in Lagos.

    NIA Director-General, Sunday Thomas who made this known at a press briefing at the weekend, said the fair will hold at the LTV premises.

    According to him, the main objective of the fair is to sensitise stakeholders both on the supply side which includes the underwriters and brokers and the demand side which includes the insuring public and the general public at large.

    He said the group is expecting the Iyaloja of Lagos, market women, artisans, small and medium enterprises (SMEs,  among others at the fair while the Commissioner for Insurance, the National Insurance Commission, Mohammed Kari, will deliver the keynote address.

    He noted that the group consider the fair important because it knows that majority of Nigerians are in the low income group.

    He said with micro insurance, member companies will be able to develop products that will meet their demand.

    He said the group also wants to leverage on the current structure with over 150 million population to deepen insurance penetration. “Majority of Nigerians are in the low income group, therefore, we want to develop products that will meet their demand. ‘’The fair will bring together all stakeholders. We are also expecting  about two information communication partners because it has proved to be very good means of selling micro insurance products,’’ he added.

     

  • NIA seeks regulator’s aid to reducte taxes

    NIA seeks regulator’s aid to reducte taxes

    The Nigerian Insurers Association (NIA) has sought the assistance of the National Insurance Commission (NAICOM) to help in pursuing the amendment of the Companies Income Tax (Amendment) Act 2007 (CITA) to relieve insurance companies of the heavy tax burdens they bear, which is capable of inhibiting the desired growth of the market.

    The NIA also want the Commission to help in sustaining its efforts in the enforcement of the compulsory insurances listed in the Insurance Act of 2003. The Chairman of the Association, GUS Wiggle presented the issues among others to the Commissioner for Insurance, Fola Daniel, during a meeting between the Commissioner and Chief Executive Officers of NIA member companies in Lagos.

    Wiggle listed the giant strides the association has made in recent times to include; sponsorship and strengthening of Customer Complaints Bureau, which is an Alternative Dispute Resolution Mechanism, awareness campaign to increase insurance education thereby bringing more people into the insurance net, and the establishment of the Energy and Allied Insurance Pool to curb capital flight.

    Others include increasing retention and building capacity in Energy and Allied Risks underwriting,  as well as sponsorship of a candidate to pursue a Master of Science Degree in Actuarial Science in a United Kingdom University as part of capacity building initiatives in that critical area of insurance practice.

    He however, urged the Commissioner to assist the association by supporting these and other initiatives in order to deepen insurance penetration. “We urge you to support the association in the drive to increase insurance penetration in Nigeria. We have taken some bold steps and we believe that they will complement the reform initiatives you have introduced. Your support is critical to the growth and expansion of the insurance market in Nigeria,” he stated

    In his response, Daniel noted that the association had taken some giant strides in some areas but added that more effort needed to be made to shore up the fortunes of insurance companies. He challenged insurers to key into the growth agenda espoused by the government as a fall-out of the Insurance Summit held in December 2014.

    While appreciating the role of insurance in national development, Daniel said the major goals of the Summit was to enable the insurance industry deliver jobs and skills development, build consumer trust and public awareness, increase access to insurance and enforcement of compulsory insurances.

    He charged underwriters to own the deliverables from the Summit and ensure attainment of set goals and urged the association to help work out modalities at ensuring competitive and appropriate rates in the industry.

    Daniel commended the association for setting up the Energy and Allied Insurance Pool and encouraged companies to key into the Pool arrangement in order to participate fully in the underwriting of Oil and Gas Insurance risks in the Nigerian market.

  • NIA pledges enforcement of insurers’ market agreement

    NIA pledges enforcement of insurers’ market agreement

    The Nigerian Insurers Association (NIA)  would soon enforce market discipline by encouraging peer review among member companies with a view to aligning the market practice with international best practices.

    This was disclosed by the newly inaugurated Chairman of the association, Godwin Wiggle at the ceremony marking his investiture as the 21st Chairman of the NIA, where he highlighted his vision for the association.

    The association, he said, has commenced the implementation of a market agreement as a way of checking ethical breaches, promoting discipline and improving service standard in the market.

    NIA market agreement, which stipulates infractions and penalties for inadequate pricing of risks, was signed by all the chief executive officers of NIA member companies in 2009, but it there are signs that members may have dumped the agreement because most of them don’t abide by it. No company has been sanctioned for failing to abide by the agreement even when companies break it.

    Wiggle said Nigeria has the comparative advantage in the production of oil and gas, therefore, the association will fast-track the process of re-establishing the oil & gas insurance pool to allow the industry reap the full benefit of the Nigerian Content Act.

    He also said the association will sustain the current effort at addressing those laws that are militating against the growth of the market, noting that the Companies Income Tax Amendment Act (CITA) 2007, amongst others, readily comes to mind.

    Wiggle further stated that the association is appreciative of the efforts of the National Insurance Commission (NAICOM) in promoting micro-insurance to deepen insurance penetration in Nigeria.

    He said: “My administration will take up the challenge of micro-insurance by encouraging member companies to institute corporate structures that will ensure the success of the initiative.

    “We will also reach out to other regulators in the financial services sector whose oversight functions impact on our business. We will increase the support for the technical committees of the Association with a view to realising their potentials, which will be harnessed for the achievement of the overall goals of the Association while strengthening the cordial relationship that exists with other arms of the industry.”

    President, Nigerian Council of Registered Insurance Brokers (NCRIB), Ayodapo Shoderu, in his goodwill message delivered by his Deputy, Kayode Okunoren, said the emergence of Wiggle as NIA Chairman will usher in the envisaged harmonious and progressive relationship between the association and the council.

    He noted that the Nigerian insurance clients have become more demanding and sophisticated, hence the need for all operators to be more professional and cohesive in the delivery of services. “Irrespective of our professional divide, we must come to terms with the need to always collaborate in order to project a positive image and to collectively grow our industry,” he said.