PRESS BRIEFING BY NIA CHAIRMAN, MR. EDDIE EFEKOHA ON TUESDAY, NOVEMBER 29, 2016 AT NIA HOUSE, 42 SAKA TINUBU STREET VICTORIA ISLAND LAGOS.
Gentlemen of the Press
Good afternoon and welcome to this Press briefing and interactive session with the Insurance Press, the first since my assumption of office as chairman of the Association in July this year.
Let me thank you for your continued support to the Association and the Insurance Industry through your reportage of activities, trends and developments in your various media. This is not to say that we have not had a bit of bad press but the idea is to take away the positives from every story. Where you have criticized us, it has provided us the opportunity for introspection.
Our industry is still work in progress and we will continue to partner with you until the industry takes its rightful place in the National Economic space.
Permit me to highlight a few issues in no particular order that have engaged the attention of the leadership of our Association in the last few months.
FRC Code of Corporate Governance:
You are aware of the National Code of Corporate Governance recently released by the Financial Reporting Council, the immediate implementation of which would have caused disruptions in the management of insurance companies.
To avoid such disruptions and the attendant consequences on the industry, the leadership of the Association reached out to the FRC with a view to working-out an agreeable timeline for implementation.
These discussions were quite insightful and rewarding but soon after the Code was suspended by the FG. Future developments on it will therefore dictate our action.
The Association, working with its appointed consultant KPMG, has sustained engagement with the relevant agencies of government with a view to finding a workable solution. The Association is more concerned with the provisions of CITA 2007 and the Stamp Duties Act 2004.
HOUSE PROBE ON INSURANCE OF GOVERNMENT ASSETS
Gentlemen of the Press, you have all keenly followed developments in the Federal House of Representatives with respect to the ongoing investigation of some member- companies that insure government assets. You must have heard the various figures and other disclosures given by the Chairman of the Ad-hoc Committee while speaking with the press. The Association would have waited for the Committee to conclude its investigation before making its comments but to date so much damage has and is still being done to the image of our industry by some of the statements credited to the Chairman of the committee which are in their material facts are inconsistent with known insurance market practice.
We will appeal to the Committee to conclude its investigation and where necessary request for clarification from our regulator and or market associations before making public statements that are capable of damaging the image of our insurance industry.
The position of the Association is summarized as follows:
There is no N200bn fraud anywhere
The Committee may not have been properly briefed about insurance
operations and its workings.
The Committee should please desist henceforth from making
statements that are capable of further damage to the insurance industry
The Association is insisting that the Committee should engage thoroughly to have a full understanding of insurance transactions before
going to the press.
The Association is ready to engage with the leadership of the
Committee with a view to shedding more lights on the operation of insurance business..
RISK BASED SUPERVISION
The National Insurance Commission has exposed its draft Guideline on risk based insurance solvency regime which is part of its ongoing risk based supervision to the Association and its members and we have taken the following bold steps to prepare our members for the RBS regime:
NIA has held a workshop conducted by Alexander Forbes, South Africa to prepare members for the implementation
The Governing Council has set up a Committee to study the Draft Guidelines and advise the Association appropriately
The Association is also studying RBS road map implementation in other Jurisdictions so as to be properly guided and be able to contribute meaningfully.
THIRD PARTY MOTOR VEHICLE INSURANCE BUSINESS
Following unhealthy competition in this class of business and the lingering issue of fake Third Party Motor Policies in circulation, the Association is in addition to the deployment of the NIID considering other measures that will reduce unnecessary competition and inappropriate pricing of Third Party Insurances.
A Committee is already working out the process and it is expected that the implementation will commence before the 2nd quarter 2017.
The Association and its members have continued to pursue policies that will improve insurance penetration in our market. Member companies have identified Bancassurance, Microinsurance, web aggregators and Telcos as veritable channels that are capable of fast-tracking penetration. However, there are challenges with the regulatory approval required for effective take off of these schemes but the good news is that the Association is working closely with Naicom to find solution the challenges.
With respect to Microinsurance, the Association is also working with Enhancing Financial Access in Africa-Efina in the areas of capacity building, market research, product development etc.
LIFE ANNUITY BUSINESS
Gentlemen of the press you will agree with me that the recent circular by Pencom to Pension Fund Administrations/ Custodians on Annuity funds has caused a lot of disquiet in the market.
The circular which we believed must have been issued without due consultation has done so much damage to the life annuity market. Operators of Life Annuity are being de-marketed by PFAs.
In its reaction to the circular, there was a meeting of CEOs of member companies to deliberate on the Circular and chart the way forward for the market. The Association has engaged NAICOM and stated its displeasure with the circular to PENCOM with copies made available to relevant government agencies.
There is an urgent need for NAICOM and PENCOM to address the public and correct the bad impression created by the circular.
In its effort at promoting good order in the management of life annuity business in our market, the NIA has concluded plans to engage a South African based Actuarial firm to assist the Association review and advice on the current market practice leveraging global practices
It is expected that the assignment will be concluded in the first quarter of year 2017
INCREASED CAPACITY ON OIL & GAS
I am happy to inform you that the Association efforts at increasing local retention and building capacity in Oil & Gas insurance is yielding positive results.
The Board of the Energy & allied Insurance have been meeting, in fact they have held one AGM and the result is encouraging more companies are making enquires and
To a large extent, it has received the support of the oil majors.
With the modest achievement of the pool it has become a point of reference for others in Africa.
A lot has been said about the Nigeria Insurance Industry Database.
As a responsive organization, we are mindful of changes in the business environment. To this end, we have identified the challenges in the current system
for checking the authenticity of motor insurance certificates. Verification is hampered during downtimes.
Consequently, we are switching to the use of the Unstructured Supplementary Service Data (USSD) Code for checking the authenticity of insurance certificates.
The major advantage of the USSD Code is that it can be used in remote towns and villages across Nigeria where connectivity is a challenge.
Gentlemen of the Press, I must thank our Commissioner for Insurance for the co- operation we have enjoyed so far and do hope that we will continue to engage for a better insurance market.
Let me also thank my colleagues in the Governing Council, especially my past Chairmen whose wealth of experience continues to provide a reservoir of knowledge and guidance. This has no doubt helped us in the management of the issues that have arisen in the past six months.
Thank you once again for coming and thank you very much indeed.