Initiatives adopted by the Acting Commissioner for Insurance, Sunday Thomas, are gradually repositioning the insurance industry for improved performance. Chuks Udo Okonta reports.
The second coming of Sunday Thomas to the National Insurance Commission (NAICOM) seems to be a divine arrangement, judging by the events that have transpired in the insurance industry in recent time.
Thomas was appointed as the Deputy Commissioner for Insurance, Technical by President Muhammadu Buhari, on April 15, 2017 and was made the Acting Commissioner for Insurance on August 9, 2019.
For someone who was previously an operator before becoming a regulator, market observers expect the best from him.
So, when his appointment as Acting Commissioner for Insurance was announced on August 9, 2019, the industry went into wide jubilation, believing Thomas appointment at the helms of affairs of NAICOM is a right peg in a right hole.
According to the Federal Government, his appointment was to ensure the effective administration of the commission in line with the provisions of the National Insurance Commission Act 1997.
Since his appointment, Thomas has been working assiduously to restore the glory of the insurance sector. This he has done through consultations and engagements with all stakeholders in the sector, which is now yielding great results judging by the relative peace that had been restored in the industry.
Since he took over the leadership of the insurance industry, Thomas has continued to engage underwriters through the Insurers’ Committee platform and other channels. The engagements have really helped stemmed the tension that had hitherto beclouded the industry. One of the fruits of those consultations is the recent extension of the recapitalisation deadline, which has brought great relief to the operators as they now have enough time to carefully execute the recapitalisation agenda.
The commission had earlier ordered insurance companies with composite license to upgrade their capital base from N5 billion to N18 billion to continue to underwrite life and non-life insurance businesses in the country.
Life insurance firms were also required to increase their minimum capital requirement from N2 billion to N8 billion, amounting to 400 per cent increase and General insurance companies have to raise their capital base to N10 billion from N3 billion and Reinsurance firms need N20 billion capital base to operate Reinsurance business as against the N10billion they were operating with presently.
However, as the previous June deadline close by and most operators are still at the preliminary stage of implementing their recapitalisation plans, the commission under Thomas leadership decided to consult relevant stakeholders on possibility of extending the deadline.
The insurance broking sector is not left out in the engagement plan as the insurance arm had had the ears of the Thomas led administration with some of their challenges seem to be presently looked into.
Prominent amongst the issues that bothered the brokers is contending with huge fines and penalties for minor infractions, which had warranted the Nigerian Council of Registered Insurance Brokers (NCRIB) to invent a mediatory platform to reduce the life threatening policies towards its members. Today, the brokers are optimistic that the issue will be over having laid it down before NAICOM.
According to the President of the NCRIB, Dr. (Mrs.) Bola Onigbogi, who is happy with the relationship between the broking sector and the insurance industry regulator, Thomas had given an assurance to support her Council. She also lauded the Thomas led administration for the duration of license renewal which had been extended by the regulator.
Still seeking for peace, NAICOM on October 29, 2019, had interactive session with shareholders association of quoted insurance companies. The engagement helped smoothened the rough edges which hitherto existed between the shareholders and the insurance regulator.
Shareholders such as, Shotunde Shopeju; Oyegunle Olayitan and Nona Awo, who attended the session commended NAICOM for organising the event and implored the commission to regularly consult shareholders before initiating programmes that affect their companies.
They also used the avenue to solicit an extension of the recapitalisation deadline, which NAICOM had recently done.
To ensure consumers of insurance products are adequately catered for, the Thomas led administration, on November 4, 2019, had a session with them in Lagos.
Thomas appreciated the consumers for attending the event which he said was designed to X-ray the factors that could be responsible for poor service delivery in the sector.
“I am indeed glad to be here and in the midst of key and most valuable stakeholders of the insurance sector. This is one of the very rare moments where all stakeholders come together to discuss challenges confronting both the demand and supply sides of the insurance sector in the country.” He said.
According to him, customers’ satisfaction is central to the sustainability and success of every business, insurance inclusive, adding that the commission is aware of some of the obvious challenges bedevilling the sector either on the side of operators, consumers, investors or regulator and that these challenges could be very overwhelming, but the regulator will not relent in looking for better ways to effectively and efficiently ensure delivery of quality services to policyholders.
“From the regulatory perspective, policyholders remains a key component of our primary constituency and therefore must ensure they are treated fairly and protected as enshrine in the relevant laws; while at the same time balancing the supervisory role of ensuring financial soundness and reliability of insurance institutions in the country.
“Suffice it to say that consumers are faced with challenges that may vary from one individual or entity’s experience to another while the provider is faced with constraints that may also differ from one company to the other. But there is no doubt regular interactions such as this one will amongst others foster a better understanding and synergy that will result to better services to the consumer,” he said.
NAICOM staff unrest
Since Thomas took over as the Acting Commissioner for Insurance, relative peace seem to have returned to the commission as workers and the management seem to have been engaging on how to put to rest the issue of workers welfare which had led to agitations and strikes in the past.
Thomas seem to have deployed his fatherly wisdom in handling the workers unrest which was really painting the commission and industry in bad light. It is believed that with the new peace in place, the commission is now poised to executive the enormous work required to drive the industry to lofty heights.
The announcement of recapitalisation deadline on December 30, 2019 by NAICOM is another colourful feather that had decorated the golden cap wore by the esteemed Acting Commissioner for Insurance.
NAICOM had in a circular signed by its Director, Policy and Regulation Directorate, Pius Agboola, entitled; Minimum Paid Up share Capital Policy for Insurance and Reinsurance Companies in Nigeria; dated December 30, 2019, announced the extension of the deadline.
The insurance sector regulator noted that it has reviewed the recapitalisation plans submitted by operators and various levels of compliance observed, and noted the inputs from the various engagements with relevant stakeholders, therefore, extends the recapitalisation deadline to December 31, 2020.
NAICOM posited that the Central Bank of Nigeria (CBN) has obliged it with the recapitalisation escrow accounts (T24) for the deposit of fresh funds raised for the recapitalisation with details: T24 Account Name: Recapitalisation Escrow – NAICOM and T24 Account No. 0230164061014.
It maintained that as parts of the measures to ease the recapitalisation, some of the relevant agencies have set up help desk to fast track processing of applications for ‘No Objection’ and for approvals, stressing that engagements with these agencies on other palliatives are on going.
Delighted by the step taken by NAICOM, on the extension of the recapitalisation deadline, the National Coordinator, Progressive Shareholders Association of Nigeria, Boniface Okezie, commended the commission for ensuring the extension. “There was no way the commission could stampede the insurance firms with the recapitalisation, considering the warbling and unstable economy and the not clear policy by the Government.
“If the Acting Commissioner continues with this trend, then it will be better for the market; as there is no need to be too rigid because you are regulating, but rather consider the plight of the stakeholders,” he said.
Okezie, however, urged the Insurance and Reinsurance companies not to relax in their efforts and plans to meet up with the exercise despite the deadline extension.He said that from information gathered, some of the insurance firms which had started the re-capitalisation in a bid to meet up with the initial deadline, might not be successful with their offer.
The shareholder advised that with the extension window, the Securities and Exchange Commission (SEC) should be proactive to extend the offer and even for those already in the market doing the Right issue. Okezie however stated that based on the new development, there is a future for most of the insurance companies to still be in the control of the local investors, instead of the foreigners.
A shareholders activist and a member of Independent Shareholders Association of Nigeria (ISAN) also lauded the Thomas led Administration, stating that the decision taken by NAICOM would help insurance operators to execute the recapitalisation without much hassle as they now have time to properly examine all the available options before them.
Observers are of the opinion that going by the successes recorded within the time Thomas has been on the saddle of leadership of the industry, he should be supported by the government and all stakeholders to enable the underwriting sector take its rightful place in the economy.
Prior to Thomas appointment as the Acting Commissioner for Insurance, he was the Deputy Commissioner in charge of technical matters at the Commission, Thomas also held the position of Director –General at the Nigerian Insurers Association (NIA) for seven years from May 2010 to April 15, 2017.
He is a vastly experienced and knowledgeable Insurance Professional with over 35 years uninterrupted service to the Nigerian insurance industry. During these years, Mr. Thomas worked as a Director for seventeen (17) years at the National Insurance Commission from 1992 to December 2009 whereat different times, he superintended over different departments in the technical division. He had also worked as an insurance operator for over 10 years and rose to the position of Assistant General Manager at AIICO Insurance Plc until he left in 1992 to join NAICOM.
Thomas is an active participant in the insurance industry activities and had served as member of several Committees not only within the insurance industry but the entire Financial Services Sector.He holds a BSc (Hons) in Actuarial Science and an MBA Finance both from the University of Lagos.