By ROSEMARY ONUOHA

The insurance industry in Nigeria is working hard to take its rightful place in the economy; as a result, all efforts are geared towards making the industry contribute meaningfully to the Gross Domestic Product (GDP) of the country.  Nigeria’s gross premium per capita of $8.9 is low when compared to $1,072, $29.9 and $49.3 for South Africa, Kenya and Ghana, respectively.  Insurance penetration as a percentage of GDP is 0.43 per cent; and only an estimated 6 per cent of the population has any form of insurance.

Before 1992, the insurance industry was being supervised by the National Insurance Supervisory Board.  Initially, the industry was being supervised by the Insurance Department in the Federal Ministry of Trade, headed by the Registrar of Insurance.  And from inception, NAICOM has been reporting to the Federal Ministry of Finance.

This is quite unlike other regulators in the country’s finance market including the apex bank, Central Bank of Nigeria and the 10 years old National Pension Commission (PenCom).

In recognition of this challenge, the four insurance Commissioners that the country had have worked hard and recorded several positives in raising the stakes of the industry.

It is therefore pertinent that the tenures of all commissioners be reviewed here.

Okwor

Chief Eugene Okwor, who was appointed as Registrar of Insurance, Federal Ministry of Trade, Lagos in 1974 and later appointed Director of Insurance in 1977, became the pioneer Commissioner for Insurance, National Insurance Supervisory Board, and the body which metamorphosed into the National Insurance Commission (NAICOM).  He served in this capacity from 1993 to 1997 when he voluntarily retired.

In this capacity Okwor supervised the carving out of the Insurance Department at the Federal Ministry of Finance and subsequently establishing the National Insurance Commission (NAICOM) as the regulator for insurance industry.

Bailey

The seven and half years tenure of Chief Oladipo Bailey was spent mostly tearing down bad structural defects and setting up new structures that formed the bedrock of what achievements that the insurance industry has recorded in the last 10 years.

At different times, Bailey confronted recalcitrant operators, particularly the insurance brokers’ fraternity that held other operators hostage and would not want any interference from any regulator who want the situation changed.

The greatest achievement of Bailey was the protection of the insurance industry from predation by banks and other hawks in the finance sector.  He warned and lobbied government to stop banks, under the guise of universal banking, from taking over insurance business, warning that it would cause serious crisis in the economy.

Universal banking policy was introduced to enable financial institutions to provide all classes of financial services under one platform, with the insurance industry as the target.  His agitation has been rewarded with the reversal of universal banking by the Central Bank a few years back.

Bailey also supervised the upward review of the capital base of insurance companies as prescribed by the Insurance Act, 1997; from N20 million, N50 million for life and special risks business to N150 million, N200 million respectively.  The capital base for composite and reinsurance companies were raised from N90 million to N350 million at the same time.  This inadequacy in this capitalisation led to its upward review during the tenure of his successor.

Chukwulozie

Chukwulozie supervised the last recapitalisation exercise in the industry, when in 1997, the Federal Government mandated reinsurance companies to raise their capital base from N350 million to N10 billion, while life and general insurers were asked to raise theirs from N150 million to N2 billion and N200 million to N3 billion respectively.

At the end of the exercise, the capital base of the industry was raised from a paltry N2 billion or thereabout to over N200 billion.  The capacity of the industry to take on high ticket risks, meet claims obligations and train its workforce improved significantly at the end of this exercise.

The embattled former commissioner for insurance worked tirelessly for the Local Content Policy in Oil and Gas Business in conjunction with the Nigerian Content Development and Monitoring Board.  This policy has become the back-bone of many non-life insurers who are slowly growing their capacity to effectively participate in this juicy but very risky business year on year.

Chukwulozie also caused the separation of operation of insurance companies into life and non-life companies and insisted that the two lines business which composite insurers used to be merged be separated and accounted for separately.  He insisted operators interested in doing composite business must register separate life and general insurance companies, an exercise which ultimately exposed the huge pension and life insurance hole in the books of many composite insurers then. This directive generated bad blood for him by the affected operators who could not get him to reverse it and subsequently got his successor to reverse it as soon as he came into office.

Also during Chukwulozie’s tenure in office, many insurance companies got their shares listed on the floor of the Nigerian Stock Exchange (NSE) and for some weeks, insurance stock led trading on the floor of the exchange.  It is unfortunate that most insurance stocks that rose to between N3 and N6 per share during his tenure have remained flat at 50 kobo per share in the last 5 years while investors have continued to shy away from them over the years.

One of the major achievements of Chukwulozie was the autonomy which the regulatory body got during former President Olusegun Obasanjo administration in 2007.  With this, the regulatory body did not have to report to the Ministry of Finance with the bottleneck and inherent challenges but report directly to the Presidency just like the Central Bank of Nigeria.

This achievement was unfortunately sacrificed on the altar of acrimony by his successors, who were bent on rubbishing all the good things he achieved in office.  This same autonomy which Chukwulozie secured for NAICOM but sacrificed by his persecutors is what the current administration in the commission has been pursuing in the last two years without any success.

Daniel

Mr. Fola Daniel was appointed Commissioner for Insurance in 2007, about two years after the removal of Chukwulozie from office.  When he came into office, the technical capacity was 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.

Daniel during his first tenure tried successfully to address these issues.  He laid off most of the dead woods in the Commission and engaged qualified, experienced and vibrant workers to carry on the business of the Commission nationwide.  The regulator had series of court cases against the umbrella body of insurers in the country, Nigerian Insurers Association (NIA), and the brokers’ body, Nigerian Council of Registered Insurance Brokers (NCRIB).  Daniel ensured that these were promptly achieved while harmony returned in the industry.

Determined to raise the contribution of the insurance industry to the nation’s Gross Domestic Product, Daniel introduced the Market Development & Restructuring Initiative (MDRI), a programme that sought to deepen insurance penetration in the country by enforcing five of the insurances made compulsory by various statutes in the country.  It collaborated with other regulators including the national Pension Commission (PenCom), National Health Insurance Scheme (NHIS) and other government agencies to ensure relevant stakeholders buy insurance.

Daniel also moved to shore up level of insurance awareness and education programme with a view to changing the mindset of Nigerian to accept insurance.  He also ensured that insurance companies no longer repudiate good claims under any guise whether rates were cut or not.

The commission under him strengthened customers’ complaint platform and a platform for the smooth resolution of the differences between the different segments of the industry.

Conclusion

Chukwulozie who was adjudged to have achieved much for the industry under his watch is now serving time for some frivolous charges stemming from disagreements he had with some stakeholders when he was in office. Stakeholders are therefore of the view, that industry players should rally round and ensure that Chukwulozie is not abandoned to his fate in jail.