NIA CAUTIONS GOVERNMENT ON ENCROACHMENT INTO INSURANCE BUSINESS

 The Nigerian Insurers Association, NIA, has charged the federal government to stop further encroachment on the business of insurance.

Chairman of NIA, Mr. Remi Olowude, who gave the charge noted that there is a recent encroachment move on insurance business by government agencies, which try to provide insurance protection to aviation passengers and public liability for nuclear risks.

He also stated that the Nuclear Agency wants to establish fund for nuclear damage insurance, instead of seeking conventional insurance cover for the risks which are covered in international insurance market

Olowude said, “The Federal Government in 2007 divested its interest in insurance business when it sold NICON and Nigeria Re, on the understanding that such concerns are better managed by the private sector. But ironically, the same Government extracted workmen’s compensation insurance business and transferred it to Nigerian Social Insurance Trust Fund, NSITF, as Employee Compensation Scheme.

In similar vein, the Federal Government split pension business between insurance industry and PFA’s, assigning the chunk of the business to National Pension Commission, PenCom and Pension Fund Operators, PFAs; while it also moved health insurance from the insurance industry to National Health Insurance Scheme, NHIS.”

“It is an open secret that the Nigerian Civil Aviation Authority, NCAA, under the Ministry of Aviation, is planning to establish insurance fund for aviation passengers’ liability,” Olowude said.

According to him, all over the world, aviation passengers’ liability is subject to international conventions and the risks are covered by conventional insurance policies; Nigeria cannot be an exception. According to Olowude, there is need for government patronage of insurance services and the need for prompt payment of premium as well.

He said, “Government and its agencies have been paying lip service to the importance and benefits of insurance, without serious patronage and support. There is hardly sufficient budget provision for payment of insurance premium by government and its agencies.

Therefore, when insurance services are patronized, payment of the premium becomes an issue, a clear negation of the provisions of the law on “No premium, No cover”.

Some government parastatals or enterprises are funded without allocation for insurance. Many insurance policies contracted by the MDAs in the past were not renewed, thus leaving the assets exposed to risk, damage and losses without insurance protection.”