By Victor Ahiuma-Young
National Union of Banks, Insurance and Financial Institutions Employees, NUBIFIE, has warned that the new policy by the National Insurance Commission, NAICOM, categorizing insurance firms into tiers 1, 2 and 3 would throw the industry into chaos leading to the collapse of many insurance companies.
The union has consequently called for a review of the categorisation policy of insurance firms to avoid collapse of many of them and subsequent job losses.
Recall that NAICOM had announced a Tier based capital policy for insurers where Tier one operators will have minimum capital base of N15 billion, Tier two will have N9 billion while Tier three will have N5 billion.
At a briefing while handing over to the in-coming President, Mr. Anthony Abakpa, out-going President of NUBIFIE, Danjuma Musa, alleged that the policy was designed for some people to acquire some insurance firms to the detriment of others.
According to Musa, the policy is discriminatory, restrictive of choice and capable of driving aground many insurance companies.
He stated: “The Union has taken cognizance of the recent policy directives by NAICOM to the insurance industry on capitalization/ categorization, supposedly intended to strengthen the industry and protect the insuring public. As much as the Union welcome policies that are geared towards strengthening the system, nonetheless such policies must necessarily be a product of extensive consultations among, at least, key stakeholders who are going to be the affected by the policy being the purveyors as such.
“The Union views the policy as discriminatory and restrictive of choice, undermines level playing ground capable of driving aground many insurance companies but, worse, a recipe for emergence of behemoth which is not good for an under-insured economy. We call on NAICOM to take another look at the policy with a view to reviewing it to address public concerns and apprehensions regarding the policy.
This is not good for under-insured economy like Nigeria. Many Nigerians prefer to buy third party insurance than others.
“We call on NAICOM to review it and address our concerns and apprehensions. NAICOM should also extend the time of compliance because some groups are planning to buy over companies that are not able to capitalise before the October deadline.”