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NAICOM asks insurers to brace up for stricter regulation

By on June 6, 2014

The National Insurance Commission (NAICOM) has said insurance regulations will become stricter going forward.

The commission replied critics who were of the view that it was over-regulating the industry, saying what they thought was over-regulation was a child’s play compared to the new regulatory regime that it intends to put in place.

The Commissioner for Insurance Mr. Fola Daniel stated this at the 41st African Insurance Organisation (AIO) Conference and General Assembly which ended in Kigali, Rwanda yesterday.

He gave a pass mark to insurance regulation in the country, saying while some operators complain about over-regulation; both the International Monetary Fund (IMF) and Standards & Poors (S&P) believe that the industry was under-regulated.

He said the regulatory body was not comfortable with its rating by both the IMF and S&P and as such intends to redouble its regulatory effort and plugging identified loopholes going forward.

“Our regulatory activity is emerging and we are not there yet. Certainly, when compared with Europe or America, we are reasonably compliant. It is public information the IMF gave an evaluation on our regulatory capacity in 2012 and we got an average which is not good but we are not satisfied because we should be above average.

“At least an evaluation has been done and we know our weak points and our strength so we are looking at the gaps and doing everything to block the gaps,” Daniel said.

“S&P said Nigerian insurance market is under-regulated but the operators say they are over regulated. But we think S&P is correct,” he added.

The commissioner explained that NAICOM has not been too hard on the operators deliberately as part of strategies to grow the industry.

Continuing, he said: “We have been threading softly deliberately because if you want to develop a sector like insurance sector, you cannot be too hard on people. We should just reprimand them and spur them to do what is correct.

“If some operators think NAICOM has been draconian so I will say where we are coming from is a child’s play because we intend to implement the laws governing insurance,” the commissioner stressed.

The commissioner also reaffirmed the report that mobile telephone insurance has successfully taken off in the country with one of the biggest service providers serving as a vehicle to sell over 100,000 policies to its subscribers monthly.

“We are currently recording 100,000 new sales monthly on that network, and if we have four other service providers doing the same, we can have rapid growth. So deploying IT and telephony to sell insurance is the wise thing to do now,” Daniel said.

Just recently, life insurance specialist, FBN Insurance Company Limited entered into partnership with Etisalat Nigeria to launch the first airtime-based combined life and personal accident insurance product tagged, “Sure4Life”.

The product, according to the companies, was designed to increase insurance penetration and consumer access to affordable insurance products using the mobile telephone network.

The product is expected to drive availability and accessibility to a cross section of the uninsured population in the country even as it offers Etisalat customers aged between 18 and 80 years who signed on to it before the end of July 2014, a month long free life and personal accident cover.

According to the General Manager of FBN Life, Mr. Segun Balogun the initiative is expected to help in efficiently deploying cheap and simple insurance products across various channels and markets and support FBN Life’s aspiration to bring the benefits of insurance to Nigerians.

It also falls in tune with the firm’s aspiration of building the biggest retail insurance business in the country even as it continues to pursue strategic partnership with other financial services and mobile telephone operators on key initiatives aimed at increasing penetration and product distribution.

The Director of Business Segment at Etisalat Nigeria, Mr. Lucas Dada, said that the partnership would bring inexpensive and easy to reach insurance products to the benefit of Etisalat’s growing prepaid and post-paid customers.

 

 

[This Day]