By Patience Saghana
National Insurance Commission (NAICOM) has expressed deep concern over the spate of malpractices indulged in by insurance operators in spite of its effort to sanitise the industry.
Mr Fola Daniel, Commissioner for Insurance whilst addressing insurance operators in Ibadan recently bewailed the height of misconducts which insurance companies had spread to government accounts especially the federal Government’s group life.
According to him, “I will like to seize the opportunity afforded by this gathering to chronicle some of the disturbing malpractices in the market: There is an urgent need to address the challenges posed by improper conduct. Unarguably our products are under_priced and serious undercutting by operators that reached its climax with the recent Federal Government’s Group life cover”.
Daniel lamented that the peak of the professional misconducts overtly displayed by operators were not hidden from inception of the group life account when practitioners threw ethical behaviours to the wind.
He said, “Much more serious acts of indiscipline were displayed with respect to the Group life cover. Right from the response to the invitation for bids, a lot of our members could not demonstrate good corporate citizenship as they were unable to produce published accounts or valid tax clearance certificates. Some brokers even applied without valid licenses, while others attempted to trade with only the CAC registration, but for the vigilance of the commission”
He stated further, “As if this tendency to criminality was not enough, some of our colleagues did all they could to get appointed, their incapacities notwithstanding as if the Public Procurement Act should not be followed or did not apply to insurance contract in any way”.
He recalled that some insurance companies even resorted to destroying themselves by every means available including the media just to have they way.
“Some resorted to blackmail soliciting the help of politicians to frustrate government policy. They wrote spurious petitions to intimidate government into appointing them to participate in the scheme. As if Newspaper publications were not enough, they got the legislature to conduct unnecessary public hearings in attempt to intimidate the executive branch of government”.
The regrettable attitudes of insurance practitioners concerned, the commission said, had cost the entire industry some goodwill and confidence which took the sector some sweat rebuild in recent years.
“Suffice to say the cost of these misbehaviours to us is enormous – loss of business, diminished goodwill and confidence of the insuring public”.
Worst still, he said that insurance brokers that were supposed to arbitrate over the squabble between insurance companies were themselves fueling the commotion.
NAICMOM boss poured out, “Brokers were not left out of these ignoble acts. Those participating in the consortium of brokers for portfolios acrimoniously sought to increase their share to the detriment of other members, a subsisting appointment notwithstanding. The Commission was compelled to intervene on a number of occasions in what ordinarily should be a business practice, to restore sanity”.
“The violation of a market agreement reached by all insurance companies following the Ijebu-Ode retreat was saddening as it resulted in the abortion of an excellent attempt to self regulation and discipline by the operators.
Even before the ink with which the agreement was written had dried, a portfolio that a group of companies had underwritten and the cover running, was purportedly poached by another company, without just cause.
“Aware that the issue of corporate governance is at the core of supervision, the Commission has continued to implement the provisions of the Code of good corporate governance for the industry.
In this connection, to ensure independence of the Board members, the Commission recently began to enforce the provision of the Code relating to directors’ independence. Accordingly, dual board membership is no longer allowed.
Companies with dual board membership have been directed to immediately restructure their boards”.
He admonished that the industry cannot continue with that attitude if the sector must move forward. “We cannot continue in this path any longer.
There must be a change of attitude and behavior amongst practitioners. We cannot continue to do the same thing all the time and expect a different result. The future is bright for the industry if only we could be more professional in our approach to the business”.