Yemisi Izuora
The National Insurance Commission (NAICOM) has denied collecting levies outside the prescription of the law.
Commissioner for Insurance Alhaji Mohammed Kari who put up defense on the issue while speaking at the 2015 Champion Insurance Day organised by Champion Newspapers in Lagos said the regulator has always acted within the ambit of the law.
He explained that the one per cent insurance levy charged by the commission on insurance firms is a statutory provision contained in the law and not a regulation of NAICOM.
Kari noted that section 16 (1)(b) of the NAICOM Act 1997 mandates all insurance institutions to remit one per cent of their gross premium to the commission as insurance levy adding that the system of funding of regulators also applies to most sector regulators in Nigeria – the FIRS, CBN, SEC, NDIC, PenCom.
The commissioner described the pressure by shareholders on the penalty levy on insurance firms as deliberate misinformation and misleading as well as usage of the shareholders as stooges by management of some insurance companies to cover up their gross financial mismanagement of their companies.
He however said the commission sympathises with the shareholders because they have a right to be aggrieved over the nil returns on their investments, adding that Operators, who choose to play in the sector must be prepared to do so in strict compliance with the extant insurance laws.
“Fines and sanctions for any default/infraction by an operator are clearly spent out in the respective laws to the knowledge and understanding of the operators.
The law may not be perfect, but as long as it remains the law, its provisions must be complied with and it is the responsibility of NAICOM, as the statutory regulatory agency of the sector to ensure every operator play by the rule” he said.
He challenged shareholders of insurance companies to demand explanations from their respective management to ascertain reasons why they continued to incur sanctions from the regulator; incur high management expenses; fail to take advantage of the huge potentials in the market and as well, the various market development initiatives introduced by NAICOM to expand their businesses.
NAICOM, he continued has continually introduced market development programmes and initiatives aimed at increasing penetration and assisting insurance institutions enhance their premium revenue generation and, by so doing, increase the industry contribution to the nation’s Gross Domestic Product (GDP).
According to him, in 2009, the Commission launched the Market Development and Restructuring Initiatives (MDRI) programme, which is a medium term industry development plan designed by the Commission with focus on the Enforcement of compulsory insurance products, Increase insurance awareness, Reduction in incidences of fake insures/insurances and Increase agency reform.
He said the initiative was successfully launched in the six geo-political zones and Abuja and was followed up by the commission also with massive awareness campaign, roadshows and seminars again in all the zones of the country.
The commissioner said the efforts were geared towards making the insurance institutions richer and better.
“The question remains whether the insurance companies have been able to take maximum advantage of this window to grow their businesses”he asked.
Kari further said that in 2013, the commission introduced and launched the Micro-insurance and Takaful under the financial inclusion programme to promote rural insurance, drive penetration, increase premium portfolios of insurance entities and generate employment to the teaming youth.