BY  ROSEMARY ONUOHA

Practitioners in the insurance sector are not disposed to demystifying the way the industry works consequently, their attitudes have contributed in making the industry a closed entity.

The matter is made worse as the operators themselves are not given to sharing ideas and systems with their colleagues, making other professionals in the financial sector to see the insurance industry as a cult.

Managing Director of Financial Institutions Training Centre (FITC), Mrs. Lucy Newman, who stated this in Lagos, noted that other operators in the financial sector especially the banks freely share systems and processes and are very open, but the insurance industry is just the opposite.

Newman lamented that the closed door attitude of the insurance industry does not augur well for practitioners in the sector because their operations most times are shrouded in secrecy.

It will be recalled that it was such closed door system that compelled some stakeholders to question the rational behind the confidentiality agreement for oil and gas risk underwriting in the country.

The controversy arose when insurers on the NNPC business were made to sign a non-disclosure pact or secrecy oath.

There were allegations that the confidentiality agreement contributed in making underwriters involved in the business to inflate the premium of the NNPC account over the years, and it was gathered that NNPC pays about $1 million as consultancy fee annually on its insurance package. From $9.6 million in 2000, the NNPC risk premium jumped to $16 million in 2001 and $51 million in 2002. However, it fell to $48 million in 2003, $44 million in 2004 and $42.5 million in 2005. In 2006 the premium rose to $57 million, fell to $53 million in 2008, $49 million in 2009 and $53 million in 2010.

A section of the confidentiality agreement as put forward by the Nigeria Insurers Association (NIA) states thus “Subject to the provisions of clause 2 below, confidential information shall be all information disclosed to the underwriter either orally or in writing on or after the date hereof by the primary underwriter and/or as its agents and shall be deemed to include, (a) all information disclosed by the primary underwriter or its agents at any meeting at which a representative of the underwriter is present, and documentation or other form of record, whether on paper, tape, disc or other medium (including sketches, drawings, plans, reports, findings, recommendations, data, memoranda, formulations, specifications and measurements), and computer programmes, source codes, firm ware or procedure instructions, any marketing plans or marketing information of the primary underwriter or its customers; and (b) any observations or evaluations of the underwriter in considering or discussing any of the information in (a) above, or any information created by the underwriter as a result of the underwriter using any information disclosed by the primary underwriter, all revisions, modifications, translations, abridgements, summaries or commentaries and/or other items in whatever form in which any information falling within (a) above has been amended, stored, modified or translated in whole or in part by the underwriter.

However, Newman tasked insurance operators to be open and willing to give information regarding their activities whenever the need arises.