Commissioner for Insurance, Mr. Fola Daniel said that the Commission is not leaving any stone unturned in reducing the activities of fake insurance operators to the barest minimum. He spoke to Rosemary Onuoha, Excerpts:
How successful is NAICOM in the war against fake insurance operators?
The people we apprehended were handed over to the Nigerian police as expected. We did some follow ups, the response we got from the police was that they were still investigating even after investigation had closed; they said they were still investigating.
We had a rethink over our processes; we discovered that we need to do more ground work. First of all before we go to arrest anybody, we need to set the stage for what are we going to do. Are we going to allow the Nigerian police to continue to frustrate our efforts or can we call for the private prosecution.
We are looking at the possibility of private prosecution and we are appealing to the attorney general to give us a fiat to enable us carry out prosecution which means our lawyers can charge offender to court. We are doing that without necessarily wanting to annoy the police because definitely they have a role to play and we must not behave in a way that we will have issues with them.
To ensure that we have more effective police collaboration I am making efforts to meet with the IG. The idea to speak with the IG is just to let him know that they are very important in our quest to fight fake insurance operators and we need them to collaborate.
We will be expecting that the IG will issue directive to all the Commissioners of police so that when people are apprehended and the police are aware they will know that they are not burying it under the file of ‘we are investigating’ they know that they have to do something.
We are also reaching out to the Federal Road Safety Corps, FRSC, who are also stakeholders in our fight against fake insurers because the FRSC have some mechanism, which they can deploy to prosecute the fake insurance operators.
One of the strategies we put in place is get the collaboration of State Governments. The State Governments are the employers of Vehicle Inspection Officers, VIOs and the VIO offices are the biggest market or platform where fake insurance products are sold.
I remember that when we raided the VIO office in Lagos, the state government was a bit embarrassed and they summoned all their VIOs and instructed them not to allow insurance to be sold in their premises. But they confirmed that their activities were given to them by their enabling Act.
So we need to go round and talk to state governments so that they can give instructions to their VIOs because VIOs of most states are acting as contractors. Most of them are self funding. I can that remember when we first did a raid in Abuja two years ago, the head of VIO in Abuja came to our office to tell us what was going on.
And he was practically appealing that we should reverse our decision not to allow insurance to be sold in their office. And I was wondering ‘what has insurance got to do with registration and licensing of vehicles.’ He said that insurance is one of the side attractions and because we stopped them operating in Abuja, people no longer come to Abuja to license.
They were taking their vehicle registration to the out skirt of Abuja just 20 minutes away from Abuja. So we really need to collaborate with the authorities so that our solo effort will no longer be solo but it will be collaborative and it will give better results.
If you ask me if what we have done has driven away the entire fake from licensing offices, the answer is no. but Nigerians have a very thick skin, so a few people will still remain there. We have done similar raiding in Lagos, Abuja, and Kano.
However, what of the fake operators in Warri, Aba, have we been able to reach all the 710 local governments? The answer is no therefore we need to collaborate with state government so that our efforts will not be entirely in vain.
What is the impact of offshore subsidiaries on insurance companies?
It is difficult for me to really tell because we are not operating a consolidated balance sheet. If the balance sheets of the insurance companies are consolidated it means that their businesses in Rwanda, Ghana, you will find everything in one booklet.
Then you can look at the bulk and say yes, this is how much each one is contributing. But that is where we are going. We are going to insist henceforth that you will give us the financials of your activities outside Nigeria so that we can truly see what the impact is. I have a personal opinion about Nigerian companies going to establish abroad.
I believe that many of our companies are chasing the shadows because some of the companies that claim to establish branches abroad do not have insurable interests that are as big as what we can find in Surulere Local Government.
For instance, Gambia has a population of less than 1.5 million including people who are staying there illegally. So if you are looking at adult population that can take one form of insurance or the other, usually could be less than one out of five.
So we are looking at about 500,000 people buying insurance when we have more than 500,000 people living in Surulere local government alone. So I believe that our market is not sufficiently exploited, therefore we should not even have reason going to all those places. That is not saying that we should close our shops, rather we should concentrate on expanding our Nigerian investment.
On whether I will give any company license to operate offshore, the answer is no. the reason is if any company is asked to go to Ghana now, we will first ask such a company ‘how many branches have you opened in Nigeria? If we are saying that we need to deepen insurance in Nigeria, then we cannot deepen insurance in Nigeria by going to Ghana.
I will be interested if companies are saying that they want to open 10 more branches in Nigeria. But I am sure that we are going to take a reasonable posture in the future and say ‘ok, we are not going to say no to your going to Ghana, but go and open one or two branches here and let us see them work.’
What is the level of employment generation in insurance sector?
I am very glad to report that insurance operators are taking very good advantage of the agency system. I know of one company alone that recruited and retained 5000 insurance agents and that company is Mutual Benefits Insurance Plc.
They have recruited over 5000 agents and we are very proud of what they are doing as a result of what they have done other companies are queuing up to follow suit. If one company will recruit 5000 agents and they are still requiting more, then we believe we have the capacity to train about 200,000 agents.
Initially, NAICOM was charging N26,000 for agency registration but now we are charging just N1000. I am also aware that the CIIN is also charging fee below N10,000 to do some training for agents. We are appealing to the CIIN to reduce this money they charge.
We are the biggest funder of the CIIN and I believe they will also reduce what they charge to the barest minimum so that insurance companies will be encouraged to engage agents. So we are doing very well as far as agency syst
em is concerned and that we are helping to create employment.
There are allegations that the FRSC will take over motor policy?