The Nigerian Insurers Association (NIA) is working with Nigerian Mortgage Refinance Company Plc (NMRC) to ensure that insurance is made a requirement for mortgage finance in the country.
Director General of NIA, Sunday Thomas, who disclosed this in Lagos, said that the technical committees of the association have made recommendations that will facilitate the integration of insurance into the requirements for mortgage facility.
The Legal Offices Committee of the NIA actually presented a position paper to the Federal Mortgage Bank on the National Housing Fund Act 1992 and the operations of the insurance industry.
It is believed that such an initiative will assist in increasing the level of insurance penetration in the country, encourage more members of the insuring public to embrace the culture of insurance and enable the industry contribute its expected quota to the nation’s Gross Domestic Product (GDP).
This move by the insurance industry is similar to the step by the National Insurance Commission (NAICOM) to ensure that all organisations wishing to bid for any contract with the Federal Government Ministries, Departments and Agencies (MDAs) are required to provide evidence of compliance with the insurance covers made compulsory by the Insurance Act 2003.
In view of the fact that companies bidding for Federal Government contracts are mandated to provide evidence of compliance with provisions of the Pension Reform Act 2014, NAICOM has been strategising to ensure that compliance with the provisions of Insurance Act is also made a pre-condition for such companies.
In compliance with Section 16 (6) (d) of the Public Procurement Act 2007, only evidence of valid group life insurance policy for employees, among other things, are required before companies wanting to bid for contracts are issued certificates of compliance with the Pension Act by the National Pension Commission (PenCom).
At present, a borrower is required to take out a mortgage loan from a participating mortgage lender based on the uniform underwriting criteria set by NMRC; while also providing regular repayments of the loan principal plus interest. The borrower will also provide collateral in the form of a mortgage over the property to be purchased.