By Rosemary Onuoha
THE National Insurance Commission, NAICOM, has warned brokers’ that are into some form of arrangements with various state governments whereby insurance policies are being offered to unsuspecting public to desist from such acts. Commissioner for Insurance, Mohammed Kari, who gave the warning during the 2016 annual chief executive officers retreat of the Nigerian Council of Registered Insurance Brokers (NCRIB) in Osun State, said that such acts are illegal.
Kari said, “We sadly found all sorts of under the table arrangements where insurance policies are being offered in conjunction with various state governments to unsuspecting public, sometimes with registered brokers and in most cases with unregistered and unlicensed entities.
This is Illegal, criminal and punishable under the laws of the country. Brokers and underwriters alike should beware as we have beamed our searchlight to that direction. Unrepentant companies and individuals that are engaged in these schemes ‘would answer’, (like we say in the new Nigerian vocabulary).
“We have also identified the limited channels of distribution as a major inhibiting factor to penetration. In this regard we have considered the creation of additional distribution channels and have gone far on the preliminary works and draft of guidelines which will soon be exposed for input.
Partnership type of operation
We have further decided to explore and develop the mystified partnership type of operation for brokers. A draft of the proposed guideline will be exposed for input within the next couple of weeks, and I can assure you it will open a new vista in insurance intermediation in Nigeria.”
The Commissioner also lamented that the increase in the number of insurance brokers in the country has not translated to increased insurance penetration. Kari said, “There has been a substantial increase in the number of players and activities; but regrettably, this increase in the number of players especially brokers is yet to reflect on the level of insurance penetration in the country.
The only possible explanation for this could be that intermediaries are not creating new businesses neither are they expanding their operations beyond the major cities of the country and around a few clients that are already converted insurance consumers. This should be of serious concern to any right thinking professional.”
Kari said that the face of regulation has changed over the years, but the objectives and purposes have continued to be providing comfort and confidence to the consumers while at the same time developing the market.
“We all know that confidence is developed by the operators behaving professionally and respectfully. The regulator’s task in this respect is to provide a level playing field and to ensure every player plays within the rules of the games. A game with no referee is definitely doomed to fail,” Kari noted.
The Commissioner stated that the task of market development is everybody’s, adding, “However it is the trend to quiz the regulator why market penetration is low. Penetration would continue to be low if everyone would only operate from the comfort of the metropolis or chase only existing clients with insurance policies.”
Kari noted that there has been increased regulatory oversight in recent times, adding “And I can assure you that this would continue.”
The Commissioner noted that the Commission is committed to its aim of using information technology to drive the supervision, regulation and governance of insurance business in Nigeria through the e-regulation program. “Parts of the e-regulation program are the Business Process Management (BPM) Project and the NAICOM Portal which will provide a direct interface with the industry to ensure greater accountability and transparency and would speed up service provision to the industry.