By Patience Saghana
Insurance companies’ Chief executivesâ€™ have condemned National Insurance Commission (NAICOM)â€™s opposition to managing directors owning and running a broking or loss adjusting firm along with their paid employment saying they won’t relinquish ownership of such companies.
They argued that they had to secure their future before and after the end of their paid job. â€œThis is the only profession we belong toâ€, they argued
Though, they admitted that the divided interest has its negative effect if not properly coordinated whilst in paid employment but pointed out that the insurance industry is the only sector they have committed the entire lives to hence they would either operate in the broking sub-sector or the loss adjusting arm of the sector in order to be relevant to the economy, the society and also put food on the table for their tables.
Insurance chieftains argued that the practice is not peculiar to insurance sector alone butÂ condemned a situation when a chief executive collect business from his broking firm and refuses to remit to the insurance company. This, they claimed is as good as sending the insurance company into extinction in no time.
A managing director of an insurance company who spoke on anonymity asked rhetorically, â€œwhere did the Insurance Commission and the Brokers’ Council expect us to go when we leave paid employment?â€.
But the National Insurance Commission (NAICOM) is vehemently against chief executive officers of insurance companies operating broking or loss adjusting firms while still in office.
Mr. Sunday Thomas, Director, (Inspectorate) of the commission said that it is unethical and it should not be encouraged. There are cases of chief executive officer of an underwriting firm having a broking firm, giving businesses to the company where he is CEO, yet there are issues of outstanding premiums.
Thomas noted that often than not, the success of the managing director’s privately owned companies depend largely on at least 80 per cent of his time and energy, addingÂ this is clearly a case of conflict of interest and divided loyalty when the CEO burns off the 80 percent to his own company at the expense of his employer’s.
He said, “Henceforth any managing director that must own a broking firm or loss adjusting firm would be compelled to disclose this to the board of directors of the company where he is CEO so that if there are issues of outstanding premiums arising from such broking firm, the board would be able to know the source of their problem”.
He said that unethical practices in the industry include inadequate rating, withholding of premium/commission, claims falsification, deliberate creation of information gap between the management and board as well as falsification of returns to the regulator.
Meanwhile, the Board of the Nigerian Council of Registered Insurance Brokers (NCRIB) has declared full support for NAICOM on its resolve to addressÂ all forms of unethical practices and sanction those caught in the act.
Past President of the council, Dr. Dede Ijere said that the NCRIB is in total support of the Commission for full disclosure byÂ managing director of underwriting companies who own brokerage firms so that where there are issues of outstanding premium in the market it could easily be traced. We are in full support of this action by the commission, he said.
He explained that the NCRIB has continued to put in place strategies to reduce unethical practices by unscrupulous brokers who err in the area of premium remittance and we shall not relent in doing so in order to preserve our image and enhance ethical standards.