By David Agba
The National Insurance Commission (NAICOM), has vowed to ensure that all genuine claims are paid from operators’ statutory deposit account in the Central Bank of Nigeria (CBN).
NAICOM while answering questions from Journalists at the just concluded media seminar it organised in Kaduna, highlighted its areas of regulatory priorities for the next three years (2017-2020). This year’s seminar theme was “Insuring the Uninsured”.
The Commission assured that within the timeframe, it would focus attention on addressing unpaid claims by mischievous operators through withdrawing money from their statutory deposits in the CBN to settle repudiated genuine claims.
Further, it would within the period address the prevailing unhealthy pricing competition among insurance operators, kick off pilot project on the Risk Base Supervision model and Flag off implementation of second phase of its Market Development and Restructuring Initiative (MDRI).
The Commissioner for Insurance, Alhaji Mohammed Kari, noted that claims payment is critical to deepening insurance penetration among Nigerians, adding that it will engender trust and confidence of the insuring public to the industry.
He said as such, any genuine claim being repudiated by any operator would be paid by the commission itself from the statutory deposits of such company with the CBN.
He said this is the easiest way to settle genuine claims from individuals which has been rejected by dubious firms.
He said for companies that continue to repudiate claims, the commission, would continue to withdraw from their statutory accounts until it has exhausted what such companies have and according to the law, if such companies fail to replenish their statutory deposits within 60 days, they will automatically eased themselves out of business.
Kari, said the commission, is neither fast nor slow to remove erring operators’ licenses but is only conducting cost benefit analysis on such action, adding that through the above means, such operators would surrender their licenses.
Kari, however, said the commission, is still considering what to do with operators who reject claims that are more than what they have in their statutory accounts.
He said the commission is yet to arrive at a solution to that.
Expert explains challenges of insurance inclusiveness
Director, Authorisation and Policy, National Insurance Commission (NAICOM), Mr Pius Agboola, has identified distance of insurance providers to the unreached as a major challenge to insurance inclusiveness in the country.
Agboola told newsmen in Abuja, that most insurance companies were based in the city, pursuing corporate and government accounts without consideration for people in the rural areas.
Reports say that the unreached are the financially excluded in insurance and are grouped as the financially poor. They are unreached due to illiteracy, ignorance and distance. According to Agboola, inappropriate products are some of the major challenges of reaching the unreached in the country. “Matching of insurance products to the need of the unreached remains a critical factor as most companies still sell conventional products instead of new products. “ Even in cases where the products are available, there are limited distribution channels to ensure the products get to the consumers. “Apart from the recently-introduced Bancassurance, the sales force of insurance companies, insurance brokers and tied agents distribution channels that existed hardly approached the unreached,’’ he said. Agboola explained that there was also the challenge of trust building initiative between the providers of insurance and the unreached, which according to him, is still very low. He noted that trust was very critical in the sale of insurance to the unreached market as the people needed to understand who they were dealing with and the value and reliability of what they were paying for. He named other challenges against insurance inclusiveness to include low awareness/consumer education, inadequate quality services and deployment of inappropriate technology. He said low and irregular income, financial literacy, religious/socio cultural beliefs, legal factors and weak government support were other challenges of ensuring insurance inclusiveness. On initiatives to enhance insurance access, Agboola said it was important to transform the informal and quasi-informal group into formal group, through appropriate distribution channels.
…Seeks partnership with Kaduna on compulsory insurance
The National Insurance Commission(NAICOM) has expressed its desire to partner Kaduna state government on implementation of the compulsory insurances.
The Commissioner for Insurance, Alhaji Mohammed Kari, while speaking during a courtesy visit of the officials of the commission to the Kaduna State Government, over the weekend, noted that such partnership will allow the commission to set up its branch in Kaduna, at a time it is considering to open more new branches across the country.
Stating that the commission launched the Market Development and Restructuring Initiative(MDRI) in 2009, he stressed the commission is commencing the second phase of the initiative, which is the enforcement of the compulsory insurances across the federation.
Kari, who applauded the state government for the developmental projects across the state, implored the state to insure all its assets with genuine insurance companies, in a bid to curb the spread of fake insurers.
Responding, Kaduna State Governor, Mallam Nasir El-Rufai, ably represented by his Deputy, Arch. Bala Bantex, said the state government will continue discussion with NAICOM with a view to ensure insurance implementation and penetration in the state.
Promising that the commission request will receive full attention of the government, he added that the idea of sanctions to enhance insurance compliance is non-avoidable.
He stated that proper adoption of insurance will contribute to the growth of the nation’s GDP, pointing out that the state government has insured some of its facilities with insurance firms, although, he said, the state would now be more careful in order not to deal with quacks.
