Operators laud naming of insurance bill review panel

INSURANCE industry operators have commended the government for the appointment of a committee to review the (insurance consolidated bill) as a welcome development for the industry.

The review committee is chaired by Dr. Omogbai-Omo Eboh. Members of the committee are a representative of Ministry of Finance; a representative of National Insurance Commission; a representative of Nigerian Insurers Association and a representative of Nigerian Council of Registered Insurance Brokers; a representative of Institute of Loss Adjusters of Nigeria; a representative of Attorney General of the Federation.

Industry chieftains who spoke to The Guardian were elated that it was a confirmation of the fact that the Insurance Act 2003 was long overdue for review to meet the present day realities.

It will be recalled that in March, 2009, the Federal Government appointed an Insurance Law Review Committee to review all laws and regulations relevant to insurance in Nigeria under the chairmanship of Professor Joe Irukwu. Although the committee submitted its work in 2010 and a draft revised Consolidated Insurance Bill which has been reviewed by the Office of the Attorney General of the Federation and Minister of Justice was to be submitted to the Federal Executive Council, but it ended in the Federal Ministry of Finance cooler.

In his reaction, the Chairman of the Nigerian Insurers Association (NIA), GUS Wiggle, said it is a welcome development for the insurance industry because of the significant role it will play in the development and growth of the market.

He said “It is a welcome development for the insurance industry in Nigeria because it is a confirmation of the fact that Insurance Act 2003 was long overdue for review so that it will meet the challenges of the present day business environment, to initiate laws that are in tandem with current realities.”

He said, for instance, the United Kingdom passed in 2015 a new revised insurance law, while Nigeria is still operating the 2003 Insurance Act.

Wiggle, who is also Managing Director/CEO, Linkage Assurance Plc, said “we hope the review will be done quickly. The NIA will be represented . We hope this new attempt will not suffer the delay the Consolidated Insurance bill report went through for more than eight years in the cooler. We pray that in the spirit of change of the new government, the committee will carry out its assignment speedily for the industry to have a new insurance legislation that will promote and grow the industry. It is a welcome development and we are delighted and fully in support.”

An insurance technocrat who pleaded anonymity said “We appreciate the Minister of Finance understood the importance of a new legislation for the development of insurance institutions as backbone of the economy. There is a strong link between development of insurance and economic development. In developed economies, insurance institutions are a major source of long-term capital and have dominant share in total financial assets”.

According to him, we hope government and all agencies of government will support the committee to come out with good draft report that will assist the industry to carry out its primary role of risk bearer.

The 2009 Insurance Law Review Committee considered 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 20 largest economies in the world by the year 2020.

The 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 of the sector.

The need to fast track the process of managing weak companies as the existing legislation is not efficient for effective distress management, the need to review the penalties as the ones prescribed in the existing laws are inadequate and not enough to deter undisciplined operators; the need to ensure ethical practice and international best practices as required by the International Association of Insurance Supervisors (IAIS).

The need for a legal and regulatory framework that allows the supervisory authority to deal promptly with issues evolving from the dynamism of the insurance business.
The Federal Government last week constituted committee to review the insurance (consolidated) bill.
The development, according to the Minister of Finance, Mrs. Kemi Adeosun, was scripted at making the bill conform to the ideals of contemporary insurance practice and ensure an efficient insurance industry in the country. It is expected that the review will form the basis of a new draft bill, which will be sent to the National Assembly for consideration.

The review committee, she said, with members drawn from the public and private sectors, is to submit its report within three months.
The review committee, soon to be inaugurated by the Minister, is chaired by Dr. Omogbai – Omo Eboh, a renowned expert in Insurance Law, while Dr. Talmiz Usman (Head of Legal Department, NAICOM) is the Secretary.

Members of the committee include a Representative of Ministry of Finance; a Representative of National Insurance Commission; a Representative of Nigerian Insurers Association and a Representative of Nigeria Council of Registered Insurance Brokers. Other members include a Representative of Institute of Loss Adjusters of Nigeria; a Representative of Attorney General of the Federation; Kamar Raji and Dr. Ladi Hamalai of the National Institute of Legal Studies.

The Minister said the activities of the review committee will be fully funded by the National Insurance Commission, which is the statutory agency of the Federal Government established to regulate and supervise the Nigerian Insurance Sector.

According to the Minister, the terms of reference of the review committee include a critical review of the draft insurance (consolidated) bill, with a view to making it a framework or principle-based Legislation; a comparative review of the Bill to align it with the powers of other financial regulators in the country as well as a thorough examination of current market problems and recommendation of appropriate regulatory powers to allow the Insurance Regulator act appropriately.

Furthermore, the review committee is to undertake a review of all other insurance laws and update the draft insurance (consolidated) bill to align with international best practices. The committee is also to make other recommendations as it deems fit for the overall good of the nation’s insurance industry.

 

Source: Guardian News