By Rosemary Onuoha

As the insurance industry awaits the divestment of banks from the sector, the National Insurance Commission (NAICOM), the regulatory body for insurance practice in the country, said that laundered money will not be allowed into the system.

To this end, NAICOM is poised to block off all laundered money as well as people with unscrupulous character from investing in the insurance sector.

Mr. Fola Daniel, Commissioner for Insurance who stated this to Vanguard in Lagos noted that the industry is not a hiding place for money launderers that are looking for places to hide stolen monies.

While decrying the risk involved in letting laundered money find its way into the insurance system, Daniel reiterated that the perpetrators of money laundering will not add any value to any company that they may invest in.

In his words “You know about the anti money laundering law, so there is a risk with somebody coming with so much money from wherever and he wants a place to invest it, these are not the kind of investors that we are looking for.”

While explaining that insurance profession is the only business where one is required to practice under the principle of utmost good faith, the commissioner stated “In all other businesses, even in newspaper houses, if I have a contract with you, I am required as a customer to be aware, in other words let the buyer be aware. Under the insurance business, there must be a principle of utmost good faith. This utmost good faith is more on the side of the insurance company.

So it is very important that the owners of insurance companies must be people of integrity and not people who can only add monetary value by bringing money to invest but people that can engender confidence in the company.”

The banking industry, according to Daniel, added some value to the insurance sector, however, the practice of banking is completely different from the practice of insurance. “I don’t know of any vibrancy from the banks because I am aware of a lot of public complaints that the banks are compelling them to deal with a particular insurance company. But people must not be compelled.

People must see reason why they are insuring with insurer A and not B and it should be driven by the kind of service particularly after sales service and claims payment and not just because they are borrowing money from a bank, Daniel maintained.”

“If you borrow money from a bank and you are still compelled to insure, primarily you are still going to pay back the money anyway. So that is not what drives insurance marketing. Insurance marketing as is done in places like UK is that you can see transparent value because you can see what you want to buy, so you are persuaded of your own.

You can take a mortgage loan from a particular bank in UK and not insure the building with them. So they must provide genuine reason for using their insurance service in addition to the banking service, and not by compulsion.

On the future of the insurance industry, the insurance regulator noted “I see a stronger insurance industry emerging because this divestment is not just open to local business people. International guys have been making enquires that they want to come into the Nigerian market.

Nigeria depicts a potentially large insurance market on account of our population. With a population of about 150 million, at least the raw material for selling insurance or for insurance to thrive really is the population which we have in abundance. So Nigeria is a good insurance destination.

So we have been having enquiries from foreign investors who want to invest. And in the last two years, I have been inundated with requests from foreign investors who want to do business here and I have been saying to them, no there are too many insurance companies as far as I am concern, judging by the level of insurance activities.

And that they should rather come and invest in an existing company. So this is an opportunity for them to realise their goal of being part of the Nigerian insurance market by investing or taking over or buying over an existing insurance company.