Address by the Commissioner for Insurance and Chief Executive of the National Insurance Commission Mr. Olorundare Sunday Thomas during the sensitisation programme for top functionaries in Kano State on implementation and enforcement of compulsory insurance in the state on December 8 2021.
Your Excellency, I am most delighted to be back in Kano as promised during my last visit to your office in October this year. The insurance sector appreciates this opportunity and swift response by your government in aligning with our objective to boost insurance penetration in Kano state as well as the entire northern region. This warm reception and action is indeed a further testimony of the giant strides of your administration in the development of Kano State.
Permit me to say that insurance industry has never been this proud that an entire state has come to a standstill this morning as the machineries of the state are all here for this launching of new face of insurance in Kano State.
Your excellency the National Insurance Commission and indeed the Nigerian insurance sector will remain grateful for your swift approval and giving effect to the following three(3) requests of the Commission during the visit in October, 2021:
a. Request for a regional office accomodation for the Commission,
b. The need to domesticate the laws on compulsory insurances in Kano State
c. The need to set up a powerful joint committee on the implementation of the compulsory insurances in the state.
Permit me to mention Your Excellency that the Insurance Act 2003 and other relevant Laws of the Federal Republic of Nigeria did make the following insurances mandatory among others;
i. Third party motor insurance in respect of all mechanically propelled vehicles that ply the public roads;
ii. All Buildings under construction that are more than two (2) floors;
iii. All Public Buildings including Schools, Offices, Hotels, Hospitals, Shopping Malls etc.;
iv. Professional indemnity for all medical practitioners and hospitals; and
v. Group life insurance cover by employers for employees where there are more than 3 persons.
vi. Annuity for retirees as provided under the Pension Reform Act 2014
It is on the above premise that we knocked at the door of the Kano State government to set the pace for the northern part of the country to embrace insurance especially with the introduction of Takaful Insurance (otherwise known as Islamic Insurance) as an alternative to the conventional insurance to cater for sentiments of religion and tradition. As expected, Your Excellency generously accepted and approve this idea for the development of insurance culture in the state. We salute your courage and commitment in this regard and we believe posterity will judge you correctly.
The Commission is monitoring closely NMSMEs in the state after the sensitisation workshop in Kano and the interest generated proved that the state is about to explode as another insurance hub in the country.
Your Excellency the implementation of motor vehicle 3rd party insurance and other compulsory insurances as contained in the terms of reference of the joint committee with the state government is indeed a welcome development. and it is expected to change the naratives by moving Kano State from its 11th position in the Gross Premium ranking to be among the first three (3) States in the federation.
Kano State is a commercial centre with huge population and business potential, the adoption and enforcement of the compulsory insurances will no doubt have a multiplier effect on insurance premium, employment opportunities, the standard of living of the people and the internally generated revenue of the state.
It my believe that the committee will workout a fashionable mechanism that will ensure Kano State to be a role model to other states in the country in the area of insurance penetration.
I urge the Committee to also look into the recurrent fire inferno in different markets across the state which have been causing so much economic havoc on our traders and the government. One of the cardinal objectives of insurance is to protect insurance service consumers against such disasters by creating the needed awareness that will forestall occurence and where the unexpected happens compensation will be paid to victims to minimise its impact.
Having the markets and goods insured is going to ensure stability and comfort for our people and also save the government some cost that ordinarily would have gone in compensating traders.
As stated during my last visit to the His Excellency, the Governor of Kano State that going by the population statistics of Kano state it is obvious that the State is a critical stakeholder in increasing insurance penetration and growth of the sector in Nigeria. This partnership is a golden opportunity to assist our people when they needed it most and for the financial services sector to also increase financial inclusion which is one of the cardinal thrust that has been a forefront policy of the federal government for a sustainable economic development and lifting families out of abject poverty.
Your Excellency, some of the benefits of insurance to the government and people of Kano state among others include:
i. Opportunity for creation of additional source of internally generated revenue (IGR) for Kano State.
ii. Reduction in government exposure in event of disaster that may affect the citizens of the state by shifting the burden to the risk-bearers (insurance companies).
iii. Financial compensation to citizens who may lose their properties or become disabled in event of occurrence of insured accidents/disasters etc.
iv. Provision of assistance on Fire-Fighting Equipment for the State Fire Service.
v. Job/employment opportunities for citizens of the state.
vi. Free Risk Management Education and Enlightment programs for the citizens of the state.
I want to assure the government and people of Kano State that with introduction of Islamic insurance (Takaful) and Microinsurance for small businesses, Kano state as a commercial nerve will not be let down by the insurance industry, we need you as much as you need us. We must let every one around us know that insurance is something you buy when you seem not to need it because it will be too late to buy when the unforeseen occurs and you may regret not buying it.
It also imperative for the government to always factor insurance whenever it is considering disbursement of funds either to farmers or traders in its poverty alleviation programs etc. it is only with insurance that the government can guarantee business sustainability and revolving of funds for the future thus providing a safety net for the NMSMEs against unforeseen circumstances while securing millions of jobs and wealth creation.
There is need for the joint committee to consider the issue of collapsed buildings that have continued to be one of the problems in our big and major cities. The state agencies that approve and monitor construction should be given mandate to look into this matter and collaborate with other agencies like the Town Plannning Authority, Fire Service, Police etc and relevant professional associations like COREN some of which should also be co-opted into the Committee. This will ensure that provisions of the law regarding the insurance of public buildings against 3rd party liability and all buildings under construction that are above 2 floors are strictly adhered to.
Your Excellency with what I have seen and the interest shown by the State Government, I know that the State Government will lead by example by ensuring that it adequately protects its assets and liabilities by effecting appropriate insurance cover.
The entire Governing Board, Management and Staff of the National Insurance Commission are sincerely appreciative of the support of the Kano State Government in this drive to give insurance a lift in Kano state.
Long live Kano State Government, Long Live Federal Republic of Nigeria.
O. S. Thomas
Commissioner for Insurance/ Chief Executive Officer