Continuous default on rules and regulations guiding insurance operation by practitioners have made the National Insurance Commission, NAICOM, to call for a new market agreement for members of the Nigerian Insurers Association, NIA, as a form of self regulation amongst insurance operators.
While charging the NIA Chairman for the market agreement, Commissioner for Insurance, Mr. Fola Daniel said, “I want to trust that you will advance on the NIA objectives and produce a new market agreement that will be signed by all the insurance companies on the basis of mutual self-regulation.”
According to Daniel, the market agreement is imperative at such a time when the cooperation and collaboration of members can no longer be described as mutual and respectful.
However opinions are divided as to the workability of another market agreement following the inability of insurers to comply with a previous one.
Recall that the NIA entered into a market agreement in 2008 when Mr. Wole Oshin was the Chairman of the Association. However, non compliance made the agreement to crumble.
Hence with NAICOM calling for a new agreement, all eyes are on the sector to see if the charge of the Commissioner will be adhered to.
Reacting to the charge from the Commissioner, new Chairman of NIA and Managing Director of Linkage Assurance Plc, Mr. Gus Wiggle said that NAICOM did not actually call for a new agreement rather the regulator charged members to key into the old existing one.
Wiggle said, “The Commissioner only made a plea for insurers to key into the old market agreement. Some members are yet to key into it because most of them don’t have a clear understanding of what the market agreement entails and not all insurers are on the same page on it.”
However, Wiggle said that his administration as the Chairman of the NIA will use persuasion to bring all members of the Association into agreeing to move the sector forward.
“The market agreement encompasses business conduct, risk pricing, customer satisfaction, and even marketing and we will make a level playing ground for everybody to comply because we want all insurers to be on the same page. I am optimistic that the NIA won’t mete out sanction to any insurer going forward. We expect all to comply on their own,” Wiggle said.
Managing Director of Wema Insurance Brokers, Mr. Gbenga Olawoyin said that the market agreement is all about conduct and behaviour among players in the insurance industry.
According to him, the previous agreement may not have worked due to cut throat competition in the insurance sector. However, he charged NAICOM to encourage appropriate pricing of risks going forward.
According to him, the market agreement is wide and is centred on market conduct, corporate governance, disclosure, claims settlement, and doing things right. The aim is to sustain businesses as well as increase insurance contribution to Gross Domestic Product, GDP.
Former Commissioner for Insurance, Mr. Oladipo Bailey said that entering a market agreement is not a problem but compliance on the part of companies has always been a challenge.
Bailey said that other sectors in the Nigerian economy can reach an agreement and stick to it, but what is obtainable in the insurance sector is a different kettle of fish because the operators find it difficult to agree on things.
Bailey said that nobody should operate as an island instead all hands must be on deck to make the insurance sector grow.
He said, “Insurance is business of trust, as such, operators really need to come together and agree to move the sector forward and all must keep to the agreement and NAICOM must ensure that the agreement works.”
The NIA was established in 1971 as an umbrella organization for all insurance companies in Nigeria, to promote and uphold the universally accepted standards of business ethics and professional integrity among its members. One of the goals of its founding fathers was to protect and advance the common interests of insurers in Nigeria by creating and sustaining a positive image for the insurance industry and contributing to legislation, and decisions made by the government and other public authorities in the best interest of the industry in particular and the national economy in general.
