THE Nigerian Insurers Association (NIA) has in its recommendations to the Senate noted that various regulations enacted by the federal government particularly those that infringe on insurance industry business have hampered development of insurance.
The NIA made this declaration in its recommendations to the Senate Committee on Banking, Insurance and Other Financial Institutions at the Stakeholders Interactive Session held in Abuja recently.
In a three page presentation, Mr. Wole Oshin, Chairman of the association who was represented by the Deputy Chairman of the NIA, Mr Olusola Ladipo-Ajayi stated, â€œ Insurance penetration in Nigeria had decreased in the past 10 years from 0.8 percent in 1999 to 0.6 percent in 2007 as a result of the impact of the following regulations:
He noted that the National Health Insurance Act, 1999 which transferred a traditional part of life insurance business to the HMOs; Pension Reform Act, 2004 which moved pension business from insurers to Pension Fund Administrators and Pension Fund Custodians; Companies Income Tax that is discriminatory and retrogressive in all its ramifications by granting all other financial services sector concession except insurance industry and imposes a heavy tax burden on insurance reserve and claims
The Employees Compensation Bill now being promoted by NSITF at the National Assembly in order to remove Workmenâ€™s Compensation business from the purview of insurance companies.
As if all that was not enough, Oshin lamented that the non-enforcement of insurance laws that would have steadily if not rapidly grow the insurance industry were not being complied with.
He cited that the compulsory insurance of public building and building under construction as backed by Section 64 and 65 of the Insurance Act 2003 and the law on marine imports as enshrined in Section 67 of Insurance Act among others.
Meanwhile the association tabled its recommendations to the senate committee that the Companies Income Tax, 2007 be reviewed with utmost urgency whilst appealing to the federal government to comply with the law on public building and building under construction.
NIA said that the Employee Compensation Bill is not the solution for compensation of work place injuries, disease and death rather that the provision of existing Workmenâ€™s Compensation Act 2004 should be amended to give it a wider coverage and compliance.
Furthermore, the association the interest rate on statutory deposit should be invested by the Central Bank of Nigeria in Federal government bonds or prime monetary rate whichever is higher so as to guarantee good returns against the present practice.
Above all, the NIA pleaded with government to endeavour to incorporate insurance premium into the annual budget of the nation.