STAKEHOLDERS in the nation’s insurance industry have appealed to President Muhammadu Buhari to look into the consolidated insurance bill, which was submitted in 2010 with a view to fast track an executive bill to the National Assembly that will facilitate passage of the bill into law.
The Director-General of the Nigerian Insurers Association (NIA), Sunday Thomas, who spoke to The Guardian said that he was privileged to be a member of the committee in 2008 that looked into the existing insurance regulation in the country, but regretted that since the Irukwu Insurance Law Review was submitted in 2010, an Executive Bill was expected to be presented to the National Assembly for passage into law in 2013, but this has not happened.
He said, “We want to appeal to the present government to look into the report with a view to fast track an executive bill so that the bill will become law”
According to him, the review of the existing law will have great impact in the operation and development of the insurance industry in Nigeria. It will give legal backing to the solid foundation laid by the National Insurance Commission (NAICOM) initiatives to drive insurance penetration particularly on micro-insurance, takaful among others.
The Commissioner for Insurance, Fola Daniel, in his remark, said an insurance bill has been on the offing since I came into office. There have been musical changes in the Federal Ministry of Finance. I have so far worked with a handful of ministers within this period and because the continuity has not been there not much progress has been made with the bill.
According to him, since that bill has not made it to the National Assembly, “but we are going to urge the new government to give priority to the passage of that bill. I am enthusiastic about it and confident that the new government will look at it seriously. I think it will be in the front burner of the new administration so that we are going to have a new insurance act”.
The National Insurance Commission (NAICOM) had identified in its strategic study that a major condition for the development of insurance business in Nigeria is a healthy legal retime. The current legislations are not only weak but also sometimes difficult to enforce.
‘The present regulatory framework, according to the commission, is compliance-based. This arrangement hardly gives the commission the capacity to take regulatory initiatives in urgent and critical situations”, he said.
The NAICOM boss had said at the Lagos Chambers of Commerce and Industry (LCCI) seminar in Lagos recently that a major condition for the development of insurance business in Nigeria is an appropriate regulatory regime. The current insurance laws in Nigeria, he said, are not only weak but also not framework as is the case with most advanced jurisdictions, thus making it nearly impossible for the commission to take regulatory initiatives in urgent and critical situations.
The committee report had identified the need for a robust legal and regulatory framework that will ensure that the insurance sector contributes positively to the principal objective of the Financial System Strategy 2020 (FSS 2020) to make Nigeria Africa’s financial hub and one of the twenty largest economies in the world by the year 2020.
Besides, there was need to evolve effective risk based supervision, in the regulatory system as against the existing rule based supervision, enabled by the current laws, has become obsolete. This ‘one cap fits all’ system cannot drive the envisioned development in the sector.
Also, the need to fast track the process of managing weak companies as the existing legislation is not efficient for effective distress management.