An insurance expert has encouraged the Nigerian insurance regulator, National Insurance Commission (NAICOM), not to drop its guard on the regulation and supervision of insurance formations under its purview.
The insurance broker, who pleaded anonymity, made the call in an interview with THISDAY in Lagos recently. According to him, both the regulator and regulated in the industry insurance should apply the two-way test to insurance regulations and address the valid complaints of the operators without lowering the guard on regulations.
“First of all, nobody wants to be regulated. So no child wants to be disciplined so there will be grumblings but are those initiatives in the long term interest of the industry and society? They are. If they are it doesn’t matter how they feel about it, we just have to continue along that path but sometimes people grumble but they go ahead and obey.
“Some of grumblings may be valid to the extent that maybe those things may be difficult to achieve under our environment. We will take the valid ones and see how we work towards achieving them,” the expert said.
The Nigerian Insurers’ Association (NIA) has identified too many reforms coming at the same time as the major challenges facing its member-companies.
The Deputy President of the association, Mr. Godwin Wiggle, in an interview with THISDAY said: “The major challenge is that we are getting to come with too many reforms at the same time. We have the Enterprise Risk Management (ERM), corporate governance, International Financial Reporting Standards (IFRS) and of course now most importantly, the new regime for the enforcement of the old law of ‘no premium no cover’. I think too many regulatory policies are stifling the abilities of some of us.
“We are too concerned with conforming to the law and not looking outward for the business growth, which is a distraction. Of course, we need to commend the commission for coming with all these new ideas that we need to conform with the best practice, but then they are all coming too many at the same time,” he complained.
Meanwhile, insurance regulators across Africa have assured worried stakeholders that rather than relax insurance regulations, they will do everything possible to protect the interests of policyholders in the continental insurance market going forward.
Acting under the auspices of the African Insurance Organisation (AIO), the regulators said it is not yet time to lower the guard on insurance regulation.
Nigeria’s Insurance Commissioner, Mr. Fola Daniel, who confirmed this in an interview with newsmen recently said it is not time to relax insurance regulations.
“Going forward from this perspective, insurance regulators did very well. Can we do better, have we learnt some lessons? Yes we have learnt lessons and regulators are agreed that it is not the time to lower the guards but to improve regulatory measures,” Daniel said.
He said the continental insurance regulators recognise the fact that the operators should not be strangulated with too much regulation of the market but at the same time, they are determined to do everything to protect the rights of the policyholders.
“We recognise the fact that we must not over regulate. There should be proportionate regulation so that you don’t regulate companies out of circulation. If some people are feeling the pains or burden of regulation in Nigeria whatever, I don’t know, but I think it is very possible.
“Primarily, the role of the regulator is to preserve the interest of the insureds and we cannot do anything that can be described as over doing it in our quest to ensure that insureds are protected,” he said.
According to Daniel, the fallouts of the recent economic meltdown across the globe justified the conservatism of insurance regulators and operators.
He recalled that it was the tight insurance regulations in the industry that made the difference for operators in the Nigerian insurance market when the chips were down.
“What came out of the economic meltdown was that the insurance regulators did very well. If you take your mind back to American International Group (AIG) you will find that the insurance segment was never affected and that was ascribed to the conservatism approach of the insurance regulators.
“We tightened the knots; we don’t have this laisser faire attitude that the Central Banks and stock brokers had. So the insurance regulators have been quite effective,” Daniel said.
Information from This Day was used in this report.