Standard Alliance Insurance Challenges Expulsion By NIA


..Demands N10bn Damages

Yemisi Izuora

Standard Alliance Insurance Plc has challenged its expulsion by the Nigerian Insurers Association, NIA, and sought N10 billion payment in damages.

This is coming after NIA recently announced the company’s expulsion from membership of the Association on the allegation of not meeting obligations to policyholders.

The company also alleged that Mr. Ganiyu Musa, who doubles as Chairman of the Governing Council of NIA and Managing Director/CEO of Cornerstone Insurance Plc ought to have recused himself from the matter given the pending case between both companies before a Federal High Court and the Economic and Financial Crimes Commission (EFCC).

Standard Alliance equally insisted that the NIA erred in expelling it from the Association over the issue of claims as it paid claims of N2.7 billion in 2018, N1.9 billion in 2019 and N1.1 billion in 2020 despite the ravaging effects of the COVID-19 pandemic.

A letter to the Director-General/CEO of NIA by solicitors to Standard Alliance Insurance Plc, Ebun-Olu Adegboruwa & Co dated July 5, 2021 stated that the reason proffered for terminating our Client’s membership is glaringly and demonstrably false, considering that in 2018, our Client made a cash premium receipt of N3,757,303,000 (Three Billion, Seven Hundred and Fifty Seven Million, Three Hundred and Three Thousand Naira) and it paid claims of N2,707,875,000 (Two Billion, Seven Hundred and Seven Million, Eight Hundred and Seventy Five Thousand Naira) inclusive of individual life policy claims.

Also, in 2019, our Client made a cash premium receipt of N2,427,120,000 (Two Billion, Four Hundred and Twenty Seven Million, One Hundred and Two Thousand Naira) and it paid claims of N1,907.834,000 (One Billion, Nine Hundred and Seven Million, Eight Hundred and Thirty Four Thousand Naira) inclusive of individual life policy claims.

In 2020, due to the effect of the Corona Virus Pandemic look-down, our Client made a cash premium receipt of N967,753,000 (Nine Hundred and Sixty Seven Million, Seven Hundred and Fifty Three Thousand Naira) and it even had to resort to other reserve funds to enable it pay claims of N1,148,327,340 (One Billion, One Hundred and Forty Eight Million, Three Hundred and Twenty Seven Thousand, Three Hundred and Forty Naira) inclusive of individual life policy claims.’

The solicitors also averred that despite replying your letter of 18th February, 2021 via our Clients’ letter of 26th April, 2021 giving the Association an update of its claims settlement portfolio, the Association proceeded to rely on Section 4 (5) of its Constitution in the letter of termination dated 18t’ February, 2021, to give our Client sixty (60) days to settle all outstanding claims failing which the Association will proceed to publish the expulsion in the national newspapers, which threat was consummated on Wednesday the 23r day of June, 2021, when the Association published thus on page 27 of The Guardian newspaper.

It said further that funds which its Client reported to the Association that Continental Re- Insurance Co. Ltd was supposed to refund to it were wrongly classified as outstanding claims against its Client.

It said that despite the purported termination of its C1ient”s membership of the Association, the latter still proceeded to demand that its Client should pay its annual subscription fees and other levies. This demand is most recently contained in the letter to our Client dated 18’h May, 2021.

The solicitors said, That our Client views its abrupt and unfair expulsion and malicious publication in the newspapers as premeditated, knowing that the Chairman of the Governing Council of the Association is Mr. Ganiyu Musa, who is also the Managing Director of Cornerstone Insurance Plc.

“Whereas there is no contention as to the fact that Mr. Ganiyu caused his company Cornerstone Insurance Plc to author a petition against our Client to the Economic and Financial Crimes Commission (EFCC) (which petition is still pending at EFCC and the Federal High Court. Lagos), it is most unprofessional if not suspicious, that the said Mr. Ganiyu Musa did not recuse from all deliberations and the eventual decision of the Governing Council in approving the purported expulsion of our Client, against which he had a pending grievance. Neither did he avail himself the provisions of Section 4(12) of the Constitution of the Association in relation to the petition against our Client to the EFCC.”

Continuing the solicitors, said, Rather than allow a thorough and unadulterated confidence in the Association’s disciplinary system against our Client, it provided its platform for Mr. Ganiyu Musa, the Chairman of the Governing Council, as the arrowhead of this unsavoury onslaught against the integrity of our Client, all in the bid to de-market our Client and frustrate its business, reputation and goodwill.

To all intents and purposes, Mr. Ganiyu Musa was not qualified to sit in judgment against our Client, since he already had vested/personal interest against our Client by the involvement of his company (Cornerstone Insurance) in the subsisting dispute pending before the EFCC and the Federal High Court, leading to conflict of interest, palpable partiality and real likelihood of bias against our Clien.

That this has polluted and indeed vitiated the entire proceedings leading to the purported expulsion of our Client, being unconstitutional null and void and liable to be set aside. This view finds support in the decisions of the Supreme Court of Nigeria in several cases on the point, particularly that of Adigun v. A-G., Oyo State (No.1) (1987) 1 NWLR (Pt. 53 ) 678, where it held as follows: “The right to fair hearing being a fundamental constitutional right guaranteed by the Constitution, the breach of it in any trial or investigation or inquiry nullifies the trial, investigation or inquiry and any action taken on them is also a nullity … If the principles of natural justice are violated in respect of any decision, it is, indeed, immaterial whether the same decision would have been arrived at in the absence of the departure from the essential principles of natural justice. The decision must be declared to be no decision.”

Be that as it may, even where the Association claims to be entitled under its Constitution to expel our Client, it is our considered view that the process through which our Client was sanctioned is manifestly tainted with fundamental infractions and a circumvention of our Client’s right to fair hearing as guaranteed by the 1999 Constitution, they said.

The solicitors observed that there is nothing in the Association’s Constitution or within professional ethics in the insurance industry which entitles the Association to publish to the general public such expulsion and to give such malicious reason so calculated to damage the credibility and reputation of our Client to the insuring public and indeed the whole world.

“In the light of the foregoing, we have our Client’s firm instructions to demand the immediate withdrawal of the letter of suspension, termination and expulsion not exceeding seven (7) clear days from the date of receipt of this letter, the same to be published with an unconditional apology in all the national newspapers wherein it was advertised, with similar or greater prominence. In addition, our Client demands from the Association, the payment of N10,000,000,000.00 (Ten Billion Naira Only) as damages for loss of its reputation resulting from the malicious publication.”

The solicitors threatened ‘that if at the expiration of the seven (7) clear days from the date of your receipt of this letter, our request on behalf of our Client is not met, we shall have no further recourse to you but will proceed to execute our Client’s further instructions to explore all lawful means of redress against the Association, including take steps to nullify the purported expulsion and to seek damages.’

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