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Single financial industry regulator unworkable, says NAICOM

By Ifeanyi Ugwuadu
Calls by the CBN governor, Mr Lamido Sanusi for a unified financial services regulatory authority is seen as a threat to the stability of the sector going by the failure of the model in the UK. There is much debate to unbundle the FSA as it had proved to be cumbersome, says analysts in the UK.

Drawing from the same scenario, Commissioner for Insurance, Mr Fola Daniel said comments credited to the CBN governor as calling on the unification of the regulators of the financial services sector may be the personal views of the governor.

Daniel observed that the same model of a single financial services regulator has failed in the UK as it poses serious challenges for any one regulator. While noting that the different laws govern the various sub-sectors of the financial services sector, he observed that the practices are different and will continue to be supervised by different regulators.

Daniel spoke at a retreat on the current NAICOM initiative on leapfrogging premium generation for the industry.  While reacting to questions on the alleged statement by the CBN governor on the unification of all the regulatory agencies in the finance industry, Daniel told insurance correspondents that the Commission will not ape CBN in its style of reforms.

Though commending Sanusi for the reforms aimed at protecting banks’ depositors, he said the same pill will not work for insurers as the ailment confronting the insurance market is different from the ills of banks.

Daniel assured that policyholders are well secured in the current capital market downturn as the Commission is monitoring the system to ensure the stability of insurance companies.  He also disclosed that the number of reported cases of unsettled claims has significantly reduced indicating that insurance companies are meeting their obligations to policyholders.

Daniel said that a lot regulatory steps have been taken to ensure that companies are always in a position to meet their obligations to their policyholders.  Similarly, issues that border on unethical conducts are severely sanctioned when the commission confirms after investigations.

However, for an industry that is managing a negative image perception, it will be counterproductive to announce publicly such measures taken by NAICOM to correct certain aberrations in the industry.

Altogether, he stressed that NAICOM is well aware of its responsibilities and will not shy away from making public misconducts by players.  “When we think making public statement of our disciplinary measures will engender trust, we will do so.”

“The insurance industry has its own headache which has to do with image and credibility issues and we are tackling them the best way possible,” he stated. “There are several shortcomings in the industry,” Daniel admitted, but added, “we are doing everything possible to address them.”


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