Director-General, Lagos State Pension Commission, (LASPEC) Mrs. Folashade Onanuga, gave a presentation at the 2nd National Conference on Insurance and Pension, organised by the National Association of Insurance and Pension Correspondents (NAIPCO) in Lagos. Excerpts.
By Rosemary Onuoha and Cynthia Alo
WHAT can be done to eliminate the cold war between life insurers and PFAs on annuity?
Pension Fund Administrators (PFAs) and life insurers should work together to build a virile pension industry rather than fighting one another in a bid to retain market dominance. The competition between the two operators must be healthy to build confidence in the Pension Reform Act (PRA) 2014.
The competition between the two operators must be healthy, otherwise, the ultimate consumer will lose confidence in the transparency the PRA advocated, as human thinking will suggest that the infighting to gain upper market share, between the two operators means that the product being sold is more to the benefit of the operators than the ultimate consumer. The ultimate consumer will therefore be wary of both products.
While marketing annuity or programmed withdrawal products, PFAs needed to understand that they don’t have a monopoly over the business, but should rather work with annuity service providers to boost the pension industry. The National Pension Commission (PenCom) and the PFAs should be able to display the list of annuity service providers on their website while annuity service providers should also be able to display similar list on their website.
Marketers of both industries need to be sanctioned where they have been accused of de-marketing, whilst sharp practice by any employee aimed at boosting market share should be exposed and appropriate punishment meted out. Both industries can only grow if we rise up and perform our roles.
Is the insurance industry well regulated?
We have legislation of insurance because we need to look at governance. Governance is all about the people. There must be the people and that is why we make laws. When we talk about governance, we look at the establishment of policies, and continuous monitoring of their proper implementations. Hence, we make laws to enable us stand out and make the society better. Laws imported from abroad should be able to be domesticated. When we bring ideas from abroad, we should be able to use them not circumvent them.
Insurance is all about risk. It is all about making our society better, so that when we suffer any unforeseen loss, we will be able to get back on our feet. Insurance is a mechanism to enable society remain vibrant. Pension is all about the people. People need help at old age, so pension makes life easy for them.
We should be able to work together to build a vibrant society which is devoid of fraudulent practices.
We need to step up a bit. A lot of things are going wrong in the insurance industry. There is a lot of backbiting, rate cutting, things done for selfish reasons and to the detriment of the society.