The Nation Newspaper

Tag: retention

  • ‘Nigeria’s reinsurance retention below 30%’

    Nigeria’s reinsurance retention of insurance business is far below 30 per cent, signifying non-compliance by operators with Federal Government’s local content policy established in 2010.

    This means that insurance companies still cede over 70 per cent of their business offshore as against 30 per cent required by the local content policy.

    The Federal Government, through the National InsuranceCommission (NAICOM) in February, said it would punish insurers who act against the local content policy. This followed its discovery that some operators either fail or refuse to consider country capacities of reinsurance institutions.

    The local content policy requires that operators consider country capacities of insurance and reinsurance institutions, such as pools, reinsurers and other locally recognised capacities up to 70 per cent, prior to applying for approval to cede 30 per cent proportion of some risks offshore.

    But Nigeria Reinsurance Corporation Managing Director, Lady Isioma Chukwuma told reporters that the percentage of risks retained in the country was not in the region of the 30 per cent stipulated as what should be taken abroad.

    She expressed dismay that operators were not complying with the guidelines of the policy and called on NAICOM to enforce compliance.

    She said: “Sometime ago, NAICOM issued circulars informing the industry that it punish insurers who act against the local content policy which is good for us. But there is no enforcement by the regulator. Yes, the regulator is helping us to ensure that local content is exhausted but they are not monitoring to ensure strict compliance to the circulars they gave out. There is no way to check errant companies and that is why businesses are still been taken abroad without exhausting local capacity.

    “The percentage of risks retained in the country now is far below what is expected. It is not in the region of the 30 per cent stipulated as what should be taken abroad. We are not claiming that we have adequate capacity to cover the risk we have presently. But what we are saying is that the local market should make sure that at least they exhaust what we have in the market.

    “All we are asking is that they should give the local market, the local reinsurance first proposal to take up their capacity, exhaust their own local capacity before they do businesses abroad because come to think of it, reinsurance is all about the spreading of risks. So, we are not saying they should retain everything locally. Let them exhaust local capacity before taking them abroad.”

    Kari, in the circular to operators in February, pointed out that in some situations where the pools, insurers or reinsurers were offered participation, the institutions were offered minimal proportion below their capacity, informally restricted and, or compelled to accept lower than their capacities for the purpose of justifying cession of the risks offshore.

    He said this unethical practice which undermines our collective resolve to ensure full utilisation of available in-country capacity in line with domestication and the local content policy, contravenes extant insurance laws and regulations, and shall not be tolerated henceforth.

    “Additionally, the Commission has observed that some insurance institutions have inappropriately arrogated to themselves the authority to unilaterally exclude some insurers over alleged outstanding claims. It has, therefore, become imperative to remind all insurance institutions that they are required to report any alleged non-settlement of claims to the statutory grievance/complaint redress mechanisms for appropriate action prior to determination of their participation.”

  • ‘Nigeria’s reinsurance retention below 30%’

    Nigeria’s reinsurance retention of insurance business is far below 30 per cent, signifying non-compliance by operators with Federal Government’s local content policy established in 2010.

    This means that insurance companies still cede over 70 per cent of their business offshore as against 30 per cent required by the local content policy.

    The Federal Government, through the National InsuranceCommission (NAICOM) in February, said it would punish insurers who act against the local content policy. This followed its discovery that some operators either fail or refuse to consider country capacities of reinsurance institutions.

    The local content policy requires that operators consider country capacities of insurance and reinsurance institutions, such as pools, reinsurers and other locally recognised capacities up to 70 per cent, prior to applying for approval to cede 30 per cent proportion of some risks offshore.

    But Nigeria Reinsurance Corporation Managing Director, Lady Isioma Chukwuma told reporters that the percentage of risks retained in the country was not in the region of the 30 per cent stipulated as what should be taken abroad.

    She expressed dismay that operators were not complying with the guidelines of the policy and called on NAICOM to enforce compliance.

    She said: “Sometime ago, NAICOM issued circulars informing the industry that it punish insurers who act against the local content policy which is good for us. But there is no enforcement by the regulator. Yes, the regulator is helping us to ensure that local content is exhausted but they are not monitoring to ensure strict compliance to the circulars they gave out. There is no way to check errant companies and that is why businesses are still been taken abroad without exhausting local capacity.

    “The percentage of risks retained in the country now is far below what is expected. It is not in the region of the 30 per cent stipulated as what should be taken abroad. We are not claiming that we have adequate capacity to cover the risk we have presently. But what we are saying is that the local market should make sure that at least they exhaust what we have in the market.

    “All we are asking is that they should give the local market, the local reinsurance first proposal to take up their capacity, exhaust their own local capacity before they do businesses abroad because come to think of it, reinsurance is all about the spreading of risks. So, we are not saying they should retain everything locally. Let them exhaust local capacity before taking them abroad.”

    Kari, in the circular to operators in February, pointed out that in some situations where the pools, insurers or reinsurers were offered participation, the institutions were offered minimal proportion below their capacity, informally restricted and, or compelled to accept lower than their capacities for the purpose of justifying cession of the risks offshore.

    He said this unethical practice which undermines our collective resolve to ensure full utilisation of available in-country capacity in line with domestication and the local content policy, contravenes extant insurance laws and regulations, and shall not be tolerated henceforth.

    “Additionally, the Commission has observed that some insurance institutions have inappropriately arrogated to themselves the authority to unilaterally exclude some insurers over alleged outstanding claims. It has, therefore, become imperative to remind all insurance institutions that they are required to report any alleged non-settlement of claims to the statutory grievance/complaint redress mechanisms for appropriate action prior to determination of their participation.”

  • Flooding: Retention pond to the rescue

    • NIESV offers to help

    As Lagos residents continue to lament the losses suffered during the week-long downpour, the Commissioner for the Environment, Dr. Babatunde Adejare, has said the government is working hard to ensure that the state is flood free.

    According to Adejare, while Lagos had experienced 475mm of rainfall in the last seven days up to last Monday, the downpour of last Saturday which stood at 178mm, was more than six months of rainfall in the city of California, USA.

    Adejare, who spoke at the sensitisation programme for the 2017 Water Technology and Environmental Control Exhibition and Conference (WATEC) held at Renaissance Hotel, GRA, Ikeja, on Monday, said to contain flooding, the government had resolved to be more stringent in the campaign against dumping of refuse in canals and drains, and would scale up the application of physical planning laws against the erection of buildings on canals, drainage channels and water courses.

    He attributed the flooding of some areas to the high tide of the lagoon, persistent rainfall and high volume of storm water, and consequent backflow from the lagoon to the drains instead of the drains discharging into the lagoon. He further said that upon the cessation of the rain, its water would have receded, and described such as a proof that it was flashflood.

    To further put such situation under control, Adejare revealed that the state is building a retention pond to assist in containing flooding. The retention pond is currently being built at Sangotedo area of the state. When completed, it will serve as a form of rainfall harvesting reservoir for storm water at the peak of the rainy season; the content will then be released into the Okota River after the rains subside.

    Adejare said the retention pond was essential as Lagos in recent times had been experiencing flash flooding due to the rise in sea level and persistent rainfall. He further expatiated that flooding all over the world was rated as the second biggest of all natural disasters.

    The retention pond is part of the state government’s response to  flooding, in addition to the existence of about 202 primary channels that also serve as storage for storm water, while also serving to drain storm water.

    In a related development, in a statement signed by the Public Relations Officer, Nigeria Institution of Estate Surveyors and Valuers (NIESV), Lagos Branch, Mr. Olurogba Orimalade,  the body regrets that in spite of the state’s investment in the development of infrastructure and urban renewal in the state, the lack of a functional maintenance policy, like managing and clearing the drains and canals, remains an albatross for having a flood free state.

    “In developed and developing nations, every local government area is supposed to have a drainage map. This map will show the drainage channels and canals. With the map, maintaining the drains becomes a much easier task. We, therefore, call on the state government as a matter of urgency, to put in place a maintenance policy which will immediately curtail any further incidence of flooding,” the statement read.

    NIESV noted that in the United Kingdom, for instance, before any new development is deemed fit for occupation, the appropriate regulatory agencies would inspect the property to confirm that such development has kept to certain standards. Such standards include environmental and sanitation standards.

    Sadly, the body noted, such checks are not carried out in Nigeria; a situation that has encouraged private developers building all sorts of structures. “Basic infrastructure like drains in and around the development therefore hardly conform to any standard, thereby giving room to scenarios where there is uneven flow within the drainage channels. This calls for a review of our approval processes during construction and before occupation, to limit the risk of houses being flooded,” NIESV said.

    The institution, therefore, offered to assist government in providing the necessary advisory towards preventing such flooding in the immediate and near future.

  • Fiscal Responsibility Commission makes case for retention

    Fiscal Responsibility Commission makes case for retention

    Following the raging debate about the proposed scrapping of some Federal Government agencies, the Fiscal Responsibility Commission (FRC) has appealed to the Federal Government to rather strengthen it to implement its anti-corruption agenda.

    The commission’s Head of Press, Mr.  AbdulGaniyu Aminu, who made the appeal in a press conference at Abuja, said that the Steve Orosanye report, which recommended the scrapping of some agencies, has become an albatross hampering FRC from performing its mandate.

    He said: “The Orosanye Report and the White Paper on same that the Commission be scrapped have been hanging on the Commission like the proverbial albatross. This has hampered the ability of the Commission to discharge its mandate. The earlier the Federal Government takes a decision on the Commission the better.”

    According to him, the cost of running the Commission is less than the revenue it induced from the Scheduled Corporations under the FRA, 2007.

    He maintained that the FRC is the least dependent agency of the Federal Government, because it has the lowest expenditure provisions in the Federal Government annual budgets.

    The FRC, he added, is a custodian of public funds rather than a spending agency, while noting that its social benefits far exceed its costs.

    Aminu revealed that about 10 states have so far enacted the Fiscal Responsibility Law at the instance of the FRC, while others are at various stages of passing the legislation.

    He further disclosed that the FRC has been monitoring and enforcing the FRA 2007 by Scheduled Corporations in the areas of the preparation of the MTEF, rendition of Audited Accounts and payment of 80% of their Operating Surplus to the Federal Government Consolidated Revenue Fund.

    He recalled, “In 2013, due to the acceptance of the Federal Government recommendations to scrap the FRC, the remittance of operating surplus rather than increase, dropped drastically as most agencies are no longer disposed to cooperating with the FRC in the discharge of its functions. In the light of the foregoing, we make bold to suggest that rather than being scrapped, the FRC should be strengthened and further empowered so as to diligently enforce the provision of FRA, 2007 to the letter.

    “In addition, the FRA, 2007 should be amended to remedy some weaknesses discovered in the course of monitoring and enforcing it.  For example, while some offences are specified, no corresponding sanctions are provided for.”