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Chuks Udo Okonta
Just like the biblical King David, who used the right stone to knock-down Goliath the enemy of the Israelites, the National Insurance Commission (NAICOM) seemed to be searching for the right tool in its its kitty to address the issue of low capital in the insurance industry, following withdrawal of the circular on Tier Based Minimum Solvency Capital (TBMSC).
The withdrawal and cancellation of the TBMSC policy, has been considered a draw back for the industry which urgently needs to take its rightful place in the financial sector of the economy.
According to the Deputy Commissioner for Insurance, Technical, Sunday Thomas, who spoke recently at a forum in Lagos, in spite the fact that the TBMSC circular was withdrawn from the market, the vision lives on.
“The fact remains that the operators need to be capitalised beyond their present level. But the Commission will look at its bag and use the appropriate tools to address this issue.
“This is a country with a population of over 180 million people. To operate at this level is not where we should be. We are conscious of that and we are determined in all our efforts and initiatives to move the industry to where it should be,” he said.
He noted that NAICOM would use its statutory powers to drive the industry to lofty heights
“However, with the little power that we have in NAICOM now, we will use it to the advantage of the market. Whatever directive that we issue is to enhance the quality of insurance market that we have as a nation and that is the single agenda that we have and this we will pursue,” he added.
To buttress the fact that the industry really needs additional capital, revelations have emerged that insurance firms with inadequate capital will in the present reality, not be considered for some high profile risks.
The President, Chartered Insurance Institute of Nigeria (CIIN) and Managing Director, Consolidated Hallmark Insurance Plc, Eddie Efekoha, had recently posited that there is a particular transaction in Exxon Mobil for several years that never respected the N3 billion capitalisation, adding that operators whose capital were not up to that minimum were excluded.
He noted that recently he was told of broker, who said his client had informed him not place risks with any underwriting firm with less than N9 billion as proposed in the cancel TBMSC policy.
Efekoha posited that with such developments, it is now immaterial whether the industry regulator withdraws the TBMSC policy, adding that the policy has opened the eyes of insurance consumers.