By Favour Nnabugwu
National Insurance Commission (NAICOM) has received kudos from insurance operators for upholding government policies in the industry against the backdrop of circumvented policies of the government.
The nation’s insurance industry in time past was bedevilled by low level of IT infrastructure, investment and deployment, inadequate regulatory framework and capacity, and existence of legislations perceived to discriminate against the insurance industry or hinder its growth and poor governance practices.
Mr Emmanuel Jegede, managing director of Nicon Insurance in an interview with Vanguard commended the efforts of the National Insurance Commission (NAICOM) under the leadership of Mr Fola Daniel, saying the commission had done well and was optimistic the insurance regulator would do more in order to put the industry in its rightful place. He said it was an unfortunate development in the past whereby laudable government policies that would have been of immense benefit to the industry were rendered impotent.
The commission in 2009 launched the industry corporate governance with the backing of market associations which according to him, had imparted some level of ethical standards in the practice of insurance business in Nigeria. Besides the government, the commission has in the last two years remained a strong motivator of government reforms in the insurance industry.
Commissioner for Insurance, Mr Fola Daniel said: “The insurance sector is expected to play a vital role as we continue to move the economy forward. The sector represents an important component in the financial intermediation chain and remains the backbone of Nigeria’s risk management system.
“A major index of that weakness had been the relatively low level of the contribution of the sector to GDP when viewed against the central role that insurance plays and the contribution it makes to the economy in other parts of the world, there is general consensus that there is huge untapped potential for the Nigerian insurance industry to grow.”
He explained that the major challenges that provided the background to the current initiatives of NAICOM to enhance both corporate governance and the overall performance of the industry, the first of its kind in the sector, include inadequate capacity and capital to handle some businesses, low level of insurance awareness and penetration resulting in low demand for insurance services and products, poor financial performance, high level of fraudulent practices and unethical behaviours context for the design of the structure of the corporation and for best practices in its operations.
It also deals with the interaction of the different actors and the way the corporation utilises the resources at its disposal in the discharge of its mandate.”
Daniel regretted that one lesson learnt in the reforms effort over the years is that it is relatively easy to effect changes in legislations and rules but far more difficult to change are engrained attitudes, dispositions and practices.
He said, “This fact informed the current initiatives of NAICOM geared towards raising the level of corporate governance in the insurance industry in Nigeria. The first major step we took in this direction was to develop a code of good corporate governance for the industry.
As with many such documents, the NAICOM code was meant to set clear standards and provide appropriate guidelines for the players on important issues of governance.