By Favour Nnabugwu

Having manned the office of the National Insurance Commission (NAICOM) at a critical period in the history of the nation’s insurance industry as the Commissioner for Insurance, Mr. Fola Daniel has less than three months to the end of his four-year tenure.

His appointment on August 1, 2007 came at a time when NAICOM was at its lowest ebb. The technical capacity was abysmally below internationally accepted regulatory indices, with core technical staff capacity of less than 20 and 153 poorly trained auxiliary staff. This was further compounded by low staff morale owing to poor working condition/environment and poor remuneration.

The industry and the commission in particular, were laced with series of litigations from the sector’s trade arms especially from the Nigerian Insurers Association and the Nigerian Council of Registered Insurance Brokers. Saddled with all those problems and the attendant challenges, Fola Daniel remained focused, determined to correct all the wrongs within NAICOM and the insurance industry.

In a space of over three years, Daniel who had come to judgment, separated the wheat from the chaff and set the ball rolling on a level playing field. His four years of leadership in the commission culminated in the following achievements: Here are some of Fola Daniel achievements.

Conclusion of the recapitalisation of the insurance industry:

Within two months of his appointment as Commissioner for Insurance, he was able to bring the controversial recapitalisation and consolidation exercise to a successful conclusion in September 2007. This resulted in the consolidation of the then 107 Insurance firms to 51.

The recapitalisation funds held in Escrow Account were subsequently released; and liquidators to administer the process of windingup insurance companies that could not meet the minimum capital requirements were appointed.

Resolution of disputes with trade arms of the industry:

Prior to Mr. Fola Daniel’s appointment, the Nigeria Insurers’ Association (NIA) and the Nigerian Council of Registered Insurance Brokers (NCRIB) had instituted several suits seeking the intervention of the court on several regulatory directives and actions.

These suits were capable of undermining the essence of the commission if not managed. Following dialogue between the commission under Daniel and the two trade associations – NIA and NCRIB, the legal challenges were dropped, paving way for out-of-court settlement.

Market Development & Restructuring Initiative (MDRI)

Determined to deepen insurance penetration in the country, the commission under Daniel, launched a market development initiative titled, Market Development and Restructuring Initiative (MDRI).

The objectives of the MDRI sas the Commissioner for Insurance, Mr. Fola Daniel are as follows: Building confidence in the Nigeria Insurance Market, Promoting public understanding of Insurance mechanism, growing the nation’s insurance premium volume and density as well as eliminating fake insurance certificates.

The programme is aimed at enforcing compulsory insurances in the country, wiping out fake insurance agents, fake certificates as well as reforming the agency system.

Improved regulatory oversight

The commission under Daniel has strengthened its core operational departments such as the inspectorate and supervision directorates. This has better repositioned the commission and enabled it to effectively supervise a reinvigorated insurance industry.

The commission under Mr. Fola Daniel’s leadership also released several guidelines, notable among which are the following: Guidelines on Annuity business, Operational guidelines for Insurance Institutions, guidelines for Oil & gas Insurance business in Nigeria among others.

Code of corporate governance

As at May 2008, the Insurance sub-sector was the only sub-sector within the financial services cector without a code of corporate governance. It was therefore imperative to have a sound code of good corporate governance that sets out the operational and procedural guidelines for insurance/reinsurance companies to strengthen internal control and reduce instances of insider abuse.

The Commission, under Fola Daniel, again rose to the occasion and incepted requisite mechanism which culminated in the release of the Code in 2008.

As a follow up to the release of the Code, the Leadership of the Commission commenced well thought out seminars and workshops to enlighten all Members of the Board of Directors of all the Insurance Companies.

These seminars have received positive endorsement of Members of the Board of Directors of Insurance Institutions who have praised the Commission for educating them on their roles/responsibilities as enshrined in the Code.

Strengthening of the complaint redress mechanism

Under the leadership of Daniel, the commission’s complaint Bureau was restructured and strengthened through the provision of required staff and working tools.

This is in line with the commission’s Policy of Zero Tolerance of Non-Payment of Claims which now compels most insurance companies to treat claims payment promptly.

This has expedited the complaints resolution processes and enabled the commission to effectively monitor Insurance companies’ claims settlement processes excluding NICON Insurance Plc where a lot of complaints relating to pension matters are yet to be resolved.

Through the Bureau, a lot of claims that were proving difficult have been paid.

About 1,500 complaints valued at about N2.2billion was adjudicated and resolved between 2007 and April 2011. This development has increase insurance consumer’s confidence in the Commission and the insurance industry.

Growth rate

Given these positive changes, the Insurance industry’s growth rate for the Year 2004 – 2007 stood at approximately 11%. The same industry experienced a growth rate of 35% for the Year 2007 – 2010 which is the highest growth rate ever experienced by the Insurance industry. The above clearly demonstrates the positive influence of the current administration’s reform programmes and initiatives.

Banks’ divestment from insurance businesses

Following the CBN directive that banks divest from insurance businesses, the Commission proactively set up an eight-man Advisory committee to work out the modalities of the divestment to ensure that the insurance companies’ interest and that of policy holders were not jeopardized after the divestment.