Insurance industry has high hopes for Consolidate Insurance Bill as a game changer- CFI

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 The Commissioner for Insurance and Chief Executive Officer, National Insurance Commission (NAICOM) and Commissioner For Insurance, CFI, Mr. Olorundare Sunday Thomas in a Q & A session during the just concluded seminar for financial Journalists in Uyo, Akwa Ibom State.
By Favour Nnabugwu
What is Naicom doing to address non-payment of claims by insurance companies?
As part of our regulatory mandate, the National Insurance Commission (NAICOM), will not waste time to sanction all insurance companies who fail to pay outstanding insurance claims”
Already, NAICOM has directed all insurance companies to commence publications of all outstanding claims in their records because some of them do not have full documentation which is not appropriate as companies are expected to settle their claims naturally.
We have also said it that there would be consequences for disobeying the Commission’s directive in that regard, one of which will be naming and shaming the defaulting companies because we are doing a lot to ensure insurance companies live up to their responsibility as regard payment of claims.
Why is it difficult for the commission to publish the status of insurance companies on a monthly basis?
The status of insurance companies can only be made available on a summarized basis because as a regulator, any announcement that comes from you, stakeholders and the general public can run with it and use it against the company.
What is the state of micro insurance business in Nigeria?
The performance of Micro-insurance is increasing from available records both from the supply side. From the micro+insurance companies, what we have seen is an increase in patronage of low-income earners and other informal organizations to join the market.
Recently, the key players who are main insurers are now also interested in micro insurance as we have received applications for window operations from insurance companies. Although there are no new products. There are a few challenges but the main challenge is networking as the infrastructure is not there due to the security situation to meet the rural areas so the investors will prefer to work in the urban areas.
We do everything possible to make insurance available and we have licensed additional micro-insurance companies and products and we have seen a lot of improvements, especially in terms of numbers and we have a dedicated unit whose primary responsibility is to promote micro insurance and takaful institutions
What is the impact of the Consolidated insurance bill not signed into law by the former President Muhammadu Buhari on the sector?
We couldn’t get it signed during the last administration because the president couldn’t assent. However, the National Assembly is looking at again. It has gone through the first reading and we are looking at how we can be able to conclude it as soon as possible. We have high hopes and we know the bill is a game changer and we are preparing ourselves.
Notably, there is a section in the bill that even addresses the issue of recapitalisation. However, companies are now willingly writing to us showing us evidence of an increase in capital. What we will be left with is individual company’s capital needs for transactions which will be dependent on the risk that the company is carrying.
Are we going to witness intervention of Naicom in the ownership of insurance companies?
Some of these companies now have new investors who have put money into it due to our intervention. For instance, IGI Insurance has a new investor and currently, the company is being restructured. IEI also has the same situation and is also going through restructuring.
However, there are still issues with some of them which we are trying to resolve. The law has also made provisions for companies to be given time to address their liquidity positions.
What is the impact of motor insurance on the industry with the new rate of N15,000?
The N5,000 has been the fee for so many years which could no longer be sustainable, hence the upward review of the price. There are a lot of commendations from underwriters and it is just eight months. The issue of N15,000 has come to stay. 7 months is too short to access the impact but the sector is already adopting to it. There are benefits of up to N3m and more that comes with the third-party motor insurance because many people are also thinking of what is coming out from their pocket and not thinking of what they will not partake in.
How has the upload of foreign exchange and inflation affected the sector?
Where there is inflation, life insurance is worst hit because the value of claims is badly affected. But by the time the entire initiative is completed, we may see a downward trend in the local currency. So, for those that are smart, they have to adjust the value of their assets.
We also call on the public to revalue their assets due to the rising inflation so as to have claims that meet the present cost of assets and also manage their risks through insurance, especially now that the cost of replacement of lost or damaged assets is very high.

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