By ROSEMARY ONUOHA
Managing Director of Niger Insurance Plc, Mr. Kola Adedeji, has said that not much has been achieved in the implementation or enforcement of the law on compulsory insurance of public buildings, despite all efforts by the National Insurance Commission, NAICOM, so far.
Adedeji said that the development confirms the opinion of experts on compulsory insurance that it should be restricted to areas where a need is generally felt and in sectors where supervision is possible at a reasonable cost.
It will be recalled that the Insurance Act of 2003 made provisions for a number of compulsory insurances amongst which is the insurance of public buildings. Section 65 of the said Act provides thus: “Every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood”
The Act defines public buildings as including tenement house, hostel, building occupied by a tenant, lodger or licensee, building where the public has ingress and aggress for the purpose of obtaining educational or medical services or recreation or transaction of business. This would include eateries, restaurants, internet cafes, shopping malls etc. Punishment for non-compliance with this provision is stated as either a fine of N100,000 and/or imprisonment of one year.
According to Adedeji, on the face of it, this provision should provide a lot of benefits to Nigerians taking into cognisance the incessant collapse of buildings nationwide especially in Lagos State.
“Nevertheless, it is important to stress that problems associated with the insurance of public buildings cannot be divorced from the general problems of the Nigerian Insurance Industry, though some peculiar challenges are identified,” Adedeji said.
He identified challenges confronting the law to include ineffective legal framework, poor compliance culture, lack of awareness on the part of the public, and ineffective implementation of strategy adopted by NAICOM.
On ineffective legislative framework, Adedeji said that generally, the legislative framework for insurance practice in Nigeria is inadequate and ineffective. “Often times we find the law making unenforceable provisions which though good on paper is almost impracticable without strong enforcement provisions,” he said.
On ineffective implementation strategy by NAICOM, Adedeji said that it may have been more beneficial to use persuasive approach through the registered associations of businesses which the law listed as requiring insurance of public buildings.
According to him, the practise of compulsory property insurance or insurance of public building is not wide spread in the world so it is innovative and therefore, may require innovative steps in order to accomplish its objectives.
Adedeji said that it is a very important aspect of insurance business that holds so much opportunity for the industry but is being affected by systemic issues that need to be resolved if all are to benefit.