Managing Director of Mutual Benefits Assurance Plc, Mr. Segun Omosehin in this interview urges the National Insurance Commission, NAICOM, to sanction operators that violate regulatory guidelines to make others fall in line.

By Rosemary Onuoha

WHY do insurers consistently fail to adhere to the local content law?

The local content law was not made today. The problem with our sector has not been lack of regulation; it is lack of enforcement of those regulations. Issuing a directive is reiterating and putting on the front burner those regulations that already exist. Some measure of enforcement coupled with sanctions when there are breaches will help bring back operators onto the line.

Segun Omosehin1

How can the regulator enforce compliance?

It is in the best interest of the market. I will continuously commend the regulator for taking some of these initiatives.  Ideally, why would you cede a risk outside when the capacity within the market has not been exhausted? It doesn’t make sense. In the UK, Lloyds would have been exhausted before you think of going to the US market. The problem has always been that sanctions are not enforced. If you just sanction one person and go to sleep others will continue.

So consistency on the part of the regulator to sanction defaulters no matter whose ox is gored will benefit the industry.  If anyone violates the guidelines and is sanctioned, people will fall in line. Look at what we are enjoying today about ‘no premium, no cover’. Now if I write ten billion naira premium, it is in my kitty. In the past when you say you write five billion naira premium, half of that is receivable and you are at the mercy of the brokers. But today the situation has reversed. So underwriters are better off as they can easily pay claims now.

With the recession that characterized the economy for most of 2016, what will you say about your performance?

For the business it was very good.  However, because we don’t operate in isolation but within the larger economy, the devaluation of the value of the naira affected our net worth.  So in absolute terms if we convert what we have done in relation to the dollar, you will realize that we did much worse than the previous year because of the exchange rate to the dollar.

That in a way also affected our balance sheet because we have one of our particular portfolio denominated in dollar. So we had to account  for some foreign exchange loss because of that particular instance. So it was a performance I would say we were proud of but the vagaries in the macro economy affected ultimately the net value of what we have been able to achieve.