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Insurance brokers in Nigeria initiate moves to support the National Insurance Commission in the enforcement of compulsory insurance policies and deepening insurance penetration in the country.
By Pita Ochai
Poor enforcement of laws has been identified as the major obstacle hindering the efforts of the National Insurance Commission (NAICOM) and other insurance operators to deepen insurance penetration in the country. Although there are laws which make insurance compulsory for certain class of businesses and activities, there has been no enforcement of such laws by insurers.
Insurance practitioners in the country are worried that there were no laws mandating specific security agencies or other government agencies to enforce specific aspects of the insurance laws, especially in terms of ensuring that offenders are apprehended and sanctioned. Over the years, 15 insurance products have been made compulsory by the federal government, but NAICOM has singled out five of these products for full enforcement under the Market Development and Restructuring Initiative (MDRI). They include the Motor Vehicle (Third Party) Insurance and the Group Life Assurance for workers at the instance of their employers. Others are insurance of buildings under construction (builders’ liability), insurance of public buildings (occupier’s liability) and professional indemnity for medical and healthcare workers.
NAICOM is also said to be engaging stakeholders on the compulsory aviation insurance as mandated by the Nigerian Civil Aviation Act 2006, while enforcing the Nigerian Oil and Gas Industry Content Development Act, 2010. Wale Banmore, managing director of Royal Prudential Life Assurance Limited, decried the non enforcement of compulsory insurance in the country. “There is no compulsory insurance in Nigeria. The attitude of people towards insurance is the same thing in all the places I have travelled to, including the United Kingdom, America, Australia and South Africa, but the difference over there is that the word compulsory is indeed compulsory. For something to be compulsory there must be consequence, but in Nigeria there is no consequence. If you don’t have group life insurance in Nigeria as an employer, who takes you to court,” he queried.
On the shortcomings of the compulsory building insurance law, Kolapo Adedeji, managing director of Niger Insurance Plc, said that no specific agency of government was charged with the enforcement of the law. “There is no separate enactment for compulsory insurance of public buildings. This inadequate legal framework makes it completely difficult to enforce the provision considering the fact that legal provisions on compulsory insurances have never been enforced against the public by NAICOM or any regulatory body at their inception,” he said.
According to him, rather than have compulsory insurances lumped under the Insurance Act, it would have been better to have separate laws for each of them such that these laws would mandate relevant enforcement agencies. “In the case of insurance of public buildings, all states’ physical planning authorities should be empowered to enforce the provisions of the Act,” he said. He noted that the law defined public buildings to include tenement houses, hostels, buildings occupied by tenant, lodger or licensee as well as buildings used for educational, medical and recreational purposes. “Where there are many tenants, e.g. in a multi-story building where we have a hospital, a restaurant and hostel on different floors, how would liability or insurable interest be determined among the tenants,” Adedeji queried.
In their quest for solution to this problem, insurance brokers across the country said they intend to partner and lobby lawmakers in the 36 states of the federation to make them see reasons and enact laws compelling residents in their respective states to comply with all the insurance policies mandated by various legislations in the country. President of the council, Ayodapo Shoderu said this initiative, which they described as a priority project for this year, was part of their contributions in support of efforts by NAICOM to deepen insurance penetration by enforcing compulsory insurances.
He observed that the incidence of building collapse and the attendant human and material losses would reduce considerably if states government could make laws enforcing compliance with relevant sections of the Insurance laws mandating certain insurances.