Yemisi Izuora
Lagos state government is seeking enforcement of Compulsory Insurance Scheme (CIS) in the state to mitigate risks resulting from violation of insurance regulations in various sectors.
The state has therefore constituted an enforcement team to tackle abuses by individuals and corporate bodies engaged in environmental and related activities within the state.
The Head of Retail Sales at AIICO Insurance, Taofik Ayeni, made the disclosure at a training organised for members of the Capital Market Correspondents Association of Nigeria, CAMCAN, in Lagos put together by the association as a capacity building initiatives to enhance members’ skill in financial market reporting through knowledge of industry-specific operations.
Ayeni, who spoke on “Safety, Risk and Financial Management” with emphasis on Insurance, pointed out that business activities globally, had become more complex in recent times.
He said the development posed great challenge to financial market reporters who are expected to show demonstrable understanding of the beat they handle.
He disclosed that the CIS enforcement team, comprising insurance practitioners and experts in other fields, would take effective steps to combat increasing incidents of building collapse in Lagos.
According to him, There is high level of abuse and compromise among those involved in environment-related activities as they overlook policy guidelines meant to guarantee the safety of life and property.
“Lagos State Government has set up a team of insurance practitioners and other professionals to enforce Occupiers’ Liability Insurance under the Compulsory Insurance scheme” Ayeni said.
Compulsory insurance, consisting of five products, refers to a class of Insurance made compulsory by law, frequently with the objective of providing protection to third parties and the general public. It was introduced in 2003.
The CIS five products are the Third Party Motor Insurance; Builders Liability Insurance; Occupiers’ Liability Insurance; Health Care Professional Indemnity (National Health Insurance); and Group Life Insurance (under Pension Reform).
Ayeni identified low awareness among the factors militating against insurance growth in Nigeria, coupled with negative attitude of the public towards the industry.
He advised CAMCAN members to intensify insurance awareness through their respective media platforms by explaining the benefits and workings of various insurance policies.
Ayeni highlighted different dimensions of insurance and application of their policies in education, trading, manufacturing, family interests and other areas.
He pointed out that most school owners were reluctant to buy into Occupiers’ Liability Insurance meant to provide cover to pupils, students and workers in their institutions against building collapse.
“Can you imagine the fatal outcome of a school building collapsing on children and teachers when classes are in session? Has anyone given a thought to the calamity resulting from the collapse of a house where people are working? This is the reason for the Occupiers’ Liability Insurance”, Ayeni said.
He said that Occupiers’ Liability Insurance would transfer the risk of such accident to the insurer, which will take the responsibility of providing the required compensation in favour of the assured.
The insurance expert advised Nigerians to imbibe the culture of insurance, noting that those who bought into life insurance during their productive age stand the chance of a future devoid of financial anxieties on retirement.
He pointed out that life at old age without adequate retirement plan could be disastrous, adding that many Nigerian business executives fell into the trap of under-estimating the serious effects of such anomaly.
He told the audience that AIICO had developed various products to address the insurance need of people in virtually every sector.
He explained that the Insurance Reform of 2003 swept off quacks and fraudulent practitioners in the sector resulting in the sanity that reign in the industry 14 years after.
According to him, Technology, competition and awareness has elevated insurance to a high level of professionalism, providing channels of regulatory enforcement that do not offer incubation for infractions.
“In the past, it was possible to see touts and charlatans parading as insurance brokers with fake policies and road-side vehicle insurance documents that created problem for both the industry and holders of such ‘policies’.
“You can now buy insurance and pay online without experiencing the logistic challenge that used to characterise the process in the past.
“At AIICO, we have trained staff who follow up with our clients after they have completed their on-line insurance purchase to interact with the client and to reassure him of the authenticity of the transaction,” Ayeni said.
Fielding questions from participants, Ayeni urged CAMCAN to engage in sufficient public education about the benefit of insurance and to advise their readers (prospective insurance clients) to always ask probing questions.
Ayeni said: “The days are gone when insurance contracts are written in tiny, unreadable and boring characters on contract documents which clients do not have the patience to read and digest.
“At AIICO, we present such documents in bold font-sizes that are easy to read so that clients can understand the terms of the contract.”
He debunked insinuations that insurance companies deliberately frustrate their clients by introducing cumbersome process that makes claims near impossible. He argued that such complaints occur when clients defaulted in their own part of the contractual obligations.
Nigeria is among the least countries in terms of insurance contribution to the Gross Domestic Product, GDP, at 0.72 per cent.
The Director-General of the National Insurance Commission, NAICOM, Sunday Thomas, attributed this to “general apathy for insurance by the Nigerian government and the citizens”.