The country’s insurance industry has been losing premium income estimated at over N5 billion yearly at the nation’s seaports, due to various infractions in the nation’s maritime underwriting business. Already, the Nigerian Insurers Association (NIA) has taken the issue to the door steps of the National Assembly for legislative intervention.
Besides, the association wants the legislators to urgently review the Companies Income Tax (Amendment) Act 2007 which has acted as impediment to the development of insurance business in Nigeria.In a presentation to the Senate Committee on Banking, Insurance and other Financial Institutions, the NIA said the non-enforcement of the law on Insurance of Marine Imports as enshrined in section 67 of Insurance Act 2003, the marine insurance portfolio has lost a lot through pilferage, piracy seizure and attacks.
The Deputy Chairman of the association, Mr. Olusola Ladipo- Ajayi said at the presentation that while the insurance penetration is increasing in similar economies in the continent, the penetration level in Nigeria has decreased in the past 10 years from 0.8 per cent in 1999 to 0.6 per cent in 2007, largely due to the impact of negative legislations in the industry.Therefore, to lift the nation’s insurance industry from the present position, he argued that there was urgent need to review the companies income tax (Amendment) Act 2007, as well as government to comply with the compulsory insurances and make adequate budgetary provisions for payment of insurance premium.
Also, the association submitted that statutory deposit by new company should be 50 per cent of the paid-up share capital, while existing insurer should deposit only 10 per cent of the capital base under the Insurance Act 2003.According to the NIA, interest payable on statutory deposit should be invested by the CBN in Federal Government Bonds or Prime Monetary Rate whichever is higher, to attract reasonable guaranteed returns as against the present practice.
However, the Marine Offices Committee (MOC) - a technical arm of the NIA said: “The high level of insecurity at the nation’s seaports calls for concern, as marine insurance portfolio has lost over N5 billion yearly through pilferage, piracy, seizure and attacks on lives and properties on our territorial waters”