Why we first push for compulsory motor insurance with State governments – NIA

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Chairman of the Nigeria Insurers Association, NIA, Mr Ganiyu Musa engages Media men during the Questions and Answers section on development issues troubling the industry and by extension the country as well. Musa who doubles as the Managing Director of Cornerstone Insurance talks about the group life, the #EndSars and a lot about industry growth and association disciplinary measures on members. Also Chairman of Council of Bureaux, ECOWAS Brown Card Insurance Scheme says the industry can understand the constraints of State Government which is why they first to them on complusory motor insurance before other ones, among others
Why is the health insurance claims not coming a year after?
Yes, no claim was paid, not because the industry doesn’t want to pay, but no claim was notified to the lead underwriter.   They have the policy document, and the criteria and the rest. I think the lead underwriter is on the policy document. If any claim was notified, settlement would have been prompt.  The issue with life policy is very straight forward; it is not like other classes that requires extensive documentation and adjustment. The basic documentation to support a death claim is very simple and straight forward.  So, it saddens us also as an industry that really we didn’t have the opportunity to leverage on that gesture, and I am not sure it is too late.  I don’t know what the notification period is in the policy.
So, it is not anything to do with the industry.   So, we are waiting, and as soon as we have a notice on valid claim, that will be attended to.
We have been engaging the regulator because they are aware; we talked about this because they are the arm of the government that is providing the interface to the industry. I hope they will take it up being that arm of the government.
How long will it take for Consolidate Insurance Bill to be concluded?
In terms of the Consolidated Insurance Bill,  left for us we would have wanted this bill concluded yesterday unfortunately, what we were made to understand is that law making  is very cumbersome and very technical especially when it is a commercial  law of this nature. When they called for the public hearing, I recalled that they have a list of up to 40 different stakeholders group. So, it is not just to take the views of NAICOM NIA and the rest.
In my understanding, after the public hearing, they retired into the technical sessions where line by line, they would look at the observations of all the stakeholders and they have a technical committee that will reconcile if there are differences or discrepancies before they now come up with the complete set of document that will be sent to the floor of the House.
From when we started the process, initially, we thought that by June, it would have gone through the legislative parts and we would just be waiting for the bill to be passed by the Executive, but unfortunately, that is where we are and whatever we say now is a statement of hope and expectation rather than knowledge because the whole process is outside our control to a large extent.  We have been doing a lot to push, and to be honest, the DG has been on it, meeting with all the relevant stakeholders.  So, we are quite eager, and I believe that the media houses, put a lot of search lights on the bill and the process, that can also bring back the sense of urgency to the legislators to move it forward.  So, you can actually help us in this regard.
How prepared is the industry for the 47th AIO?
Let me start with the AIO: it will hold from 4th-8th of September, and it is going to be hybrid. Attendance for most of us will be in-country, and the executives of AIO will be physically on the ground. Limited numbers from outside of the country and the rest of the continent will be using virtual platform.
 In terms of the physical preparation, recall that we had everything locked down when COVID -19 started, and we did everything practically possible, and thought we could hold it in May; we secured the facility at Eko Hotel, and we paid the deposit; so, we didn’t fully de-commissioned all those, we just reconstituted the Local Organizing Committee that is currently chaired by the Vice-Chair person of the Association.  So, I can assure you that we are good to go.
Of course, a number of arrangements that we had made before has to change because of the change.  Initially, it was supposed to be physical, we now have to engage virtual conference provides and like they said that “necessity is the mother of invention”.  So, we are good to go, and very soon, the LOC will have a discussion with your group to give you an update of what has been done and what is left to be done.
How much claims have insurance companies incurred for #EndSars protest?
ENDSARS:  I am not sure we can get those details because insurance is contractual and it is personal. Even when we pay a claim, unless we have approval from the insured, we can not divulge the fact that we have paid so much to this particular person. Within that we can talk about aggregate. Like I said we had 1,652 claims notified, and we paid N4.5 billion, but as for how much we have paid to a specific individual, we would not be able to say, because they can sue us; it go against Customers confidentiality.
What impact will punishing erring members have on the industry?
Yes, quarter one is gone, and it takes grace for all the reporting entities to submit especially the ones that are not listed, but based on the ones that are reported so far, I think quarter one was quite successful. just like 2020 when we had our worst fears, but from the numbers that have come in from our members, the industry actually grew by a decent number. We have seen operators report double-digit growths in a year we are all scared that the level of activities would go done.
 The insurance circle is usually 18 months behind the economic circle, so it might be that by the time the pandemic struck on our own shore, our biggest renewal periods in the Nigeria market is January renewal, and January had been concluded then, and it might be that it will take another circle before we see the real impact. If January 2021 is anything to go by, I think we have actually recorded a decent growth level in quarter one.
To answer your question on the impact of the suspension of members, you are right; we are also asking the same question.  The point is, if you belong to an association that is prestigious like the NIA, and you are suddenly kicked out of the Association, that was insured with you, I would be asking you a lot of questions.  It is that sort of pressure that we are trying to exert on the members to see that really that benefits of belonging to an association like the NIA, even if it voluntary, that is why you have that stamp you put on your policies and on your letter-head and the rest, and if you are losing that badge we believe it should be enough pressure for you to want to do the right thing.
And also, it should be a queue for the regulator  because if a voluntary association has taken this step, then you have a regulator  that actually has the powers to compel them to do things, and for you also as an insured, it strengthens your case, for instance, if you need to go to the regulator or to go to court; so  you need to look at all those dimensions, and if in the face of all these threats, if they don’t behave well, it means that  they don’t deserve to be in the industry.
Yes, we don’t have enforcement capability but these pressure points will compel the entities concerned to do the right things, and if you don’t, there could be significant consequences and I can assure you that those ones that are facing suspension, are not taking it lightly; they are running up and down, trying to do things right,  which means that the suspension is working

What is NIA to ensure all States comply with group life policy?

Starting with the question on Group Life for government, I think you somehow answered the question with your next question.   The truth is, a number of the states in the federation right now are not viable. You can imagine where some of them are reputed to owe several months of salaries. They are not paying salaries, and so the last thing that you talk to them about is group life, which is supposed to be generated from the salaries. The salaries are not being paid. Unfortunately, even for organized labour, this is the sort of thing that they should be fighting for because we know bad things happen to good people, at times.  The surest thing, at least, if you love your family or your beneficiaries, you should be interested in what happens to them when you are not there, but their fight is always on other issues.  We recognized the constraint of the states government, and that is why our first approach is on the issue of the Compulsory Third-Party.  The premium is not coming from the states government, but from the insured, so it is easier to have access to renew your vehicle license. The law says you should have a third-party; we have not given up, we are still engaging but the reality is that where there is no money, there is nothing you can do even with the best of intentions.

For Head of Service, HoS, this year, am aware there is a conversation going on regarding the renewal and the provision of data. I am sure the NIA Director-General, DG can provide the latest of the data, but I am not sure it has been concluded.  There’s been series of meetings with the office of the Head of Service, HoS; the Life Offices Committee, and the regulator- NAICOM.  So, we are hoping that any moment from now, that would be concluded and the cover reinstated for the federal employees.

Yes, the situation in the country is extremely serious, and even though you have anchored the question on the economic situation but beyond that, you have the major insecurity situations which are significant in economic implications.  We are faced today with food insecurity, the country is threatened because the farmers can’t farm, and when you farm, you can’t take your product from the farm to where it is needed, and that’s what I was trying to reference. At times, the insurance circle could be 18 months behind the economic circles, and the exchange rate is driving down the interest rates, and today we all depend on investments income to augment our profits and when the investment incomes go down, you know what the results would be. And of course, the government is still a major participant in the economic activities of the country.  So, it is a pathetic situation and the full impacts will begin to show up if things don’t change in the next few months or so.

Why are insurance companies don’t ensure their presence are felt at licensing offices?

On the issue of the weak insurance companies, we all agreed in the association that individual companies should disengage from the licensing offices, so, I would be surprised if you see any of the staff of the companies. Apparently, certificates may have been dumped with them, and at times, a number of those certificates have been forged by criminal elements operating in the licensing offices.  So, the reason is not far- fetched. 

As an association, we took a decision that for the third-party policy that is compulsory, nobody should undercut.  So, a number of those certificates you see at the licensing offices are faked and no premium has been charged or paid.   So, the weak ones don’t care; they need to live from day to day as out of the N5000, even if it is N2000 you give them per policy, they will take it.  And that’s why you have the problems – they will never pay claims.    

That is what the portal is meant to address.   And all of us would have to work together, and again, we really rely on helps from you to spread the message.  Even though the portal is online, as an underwriter, when you issue a physical policy, immediately, within a few minutes, you are to upload it on the platform; so it is not only when it is purchased online.  

And when they give you the certificate, immediately you can check, using that USSD code to see if that policy is genuine or not.  If it is not genuine, you can confront the person that gave it to you, and said: “You collected my N5, 000, and you gave me a fake policy.”

 Of course, if you move a few meters and you are stopped by the police, they are going to do the same thing, and see that the policy is fake.  So, it’s all tied to the issue of the awareness that we talked about.  

The platform is there, and it caters to both online purchases and offline purchases.  Of course, most of our underwriters have already integrated the platform into their own applications such that the moment you issue a policy, you instantaneously  load on the portal, it is updated and it becomes visible to all the security agencies, so it is not only limited to the online version. What is required is the awareness for people to know about it, and why is difficult to stop the people at the licensing office is that the greatest pressure can come from the insured if you go here to renew your license and they collected N5000 from you; you can go back to them and say what you have given me is not genuine; that way, the process of change can start little by little. 

Mr Ganiyu Musa, NIA Chairman

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