The National Insurance Commission (NAICOM) and the Nigerian Council of Registered Insurance brokers (NCRIB) have resolves their differences which erupted as a result of some recommendations made to the government in the insurance act 2003 under review.
The brokers who Vanguard gathered were almost going to court over what they alleged as undermining their importance in the review of the act bit were quick to settle before it degenerate to hot battle.The brokers claimed that they were lucky to have had a copy of the report before hand to know if they were accorded the charter status and also given a good leverage of autonomy they deserve in the act but unfortunately the recommendations were too stiff for the brokers hence they raised alarm.
And NAICOM’s committee and the NCRIB’s committee had to meet on a number of occasions to reach a compromise which was both acceptable to both parties.Having achieved that, the industry is now expecting the proposed amendment to the insurance laws to become approved by the government.NCRIB said the body deserves to be allowed to disciple its members rather than having the commission to tissue license to a broker whose license was not renewed by the NCRIB for one reason or other.
Mr. Fola Daniel, Commissioner for Insurance stated that the commission and indeed the insurance industry have observed that the sector’s legal framework are too prescriptive and do not adequately address some fundamental issues. The Federal Government is currently reviewing the submissions of the insurance law review
He stated that from the current year, the “relevance, impact, performance and public opinion of insurance” would change for the better, adding that in addition to the fact that the performance of the industry is expected to soar above that of leading insurance markets in the continent, claims profile of the industry would improve for the better.Mr Remi Babalola, former Minister of State for Finance has said that the need to review these Acts was a product of a rigorous situation appraisal of the Insurance industry in Nigeria. In the financial services sector, Insurance, expectedly, has the biggest income earning potential, but the Nigerian Insurance Industry has been operating sub-optimally.
According to him, “Institutional and individual capacities have remained largely under-utilised while economic opportunities, crucial to national growth, became lost in the process. The Banking sector has continued to post impressive indices of successful transformation, while the Insurance sector has consistently trailed behind in its financial results with marginal and intangible results.“This unsatisfactory trend is disturbing and unacceptable to the Federal Government. Therefore, there is an urgent need to refocus the industry, and this explains the need for this exercise.”The former minister noted that Nigerians should be encouraged to voluntarily purchase various insurance policies, especially individual life policy, at very attractive prices without any compulsion through the instrument of the law.
“A clear framework is also needed to enable the large insurers become more involved in serving the low-income market.”Small insurers to become increasingly professional and expand; insurance brokerage to take root and good governance to create and sustain trust in the insurance business,”Count down to the submission of the report of the review of NAICOM Act 1997 and Insurance Act 2003 is on and underwriters among other submissions are anticipating that the committee would recommend to the federal government the need to synchronize all relevant laws on insurance practice in Nigeria, including the Pension Reform Act, 2004; Nigerian Council of Registered Insurance Brokers (NCRIB) Act No. 21 of 2003; Workmen’s Compensation Act of 1987 and; Third Party Insurance Act 1945.
Insurance operators believe that the Insurance Act 2003 which repealed Insurance Decree No. 2 of 1997 did re-enact many of the provisions of the former law whilst several other new provisions were added to it, yet came with lot of flaws and neck-twisted provisions.Some sections in the Insurance Act operators would want to be critically reviewed, according to Financial Vanguard investigations, are section 2(1) and section 2 (b) which deal with group life and pension business.
They would want the amendment to read pension and Annuity business; sections 2(3)(h) which talks about Miscellaneous insurance business to clearly read Section 2(3)(h) & (i) as Employee Compensation insurance business and (i) Miscellaneous insurance business.Other sections of the Insurance Act which operators want government to look into include: section 19 (b); Section 8 (m); section 9 (1) (a); section 5 (2); Section 9 (2) (b); section 9 (3) and (4); Section 10 (1) & (3); section 24 (1), (2), (3) & (13); Section 50 (1); section 64 (2) and 65 (1-4) and section 79 among others.