Respite came the way of Nigerian insurance industry yesterday as the federal Government promised to offset all outstanding premium owed to the sector as soon as the economic situation of the country improves.
The Minister of Finance, Mrs Kemi Adeosun at the National Insurance Commission (NAICOM)’s 2015 Staff retreat in Abuja said government is cautious of its debt to the sector and will endeavour to clear its debt as soon the country recovers from the economic downturn
Adeosun said, “Government meeting its responsibility of paying premiums to some extent is a challenge; you will also agree with me that there is a serious situation in the country in terms of revenue that accrues to government.”
“When there is challenge in the revenue that accrues to government naturally it will affect all the spending of government. That is one of the aspects that government is dealing with but very soon as the economy improves, government will fulfil all its responsibilities by paying all its commitments.”
Cumulative premium on group life insurance owed to the nation’s insurance industry by the Federal government runs over N10billion
The Minister said, that does not debar the industry from meeting its expectations of the federal government, “The tasks ahead are onerous. It is the expectation of Government that the Nigerian Insurance Industry should wake up to its responsibilities. As a potential growth area of our economy, it must accept the challenges of change.”
“It must surmount its timidity and shapeup and contribute to the turnaround of the economy. It must contribute positively to the Gross Domestic Product (GDP) and creation of employment. It can achieve these by cleaning itself of the bad eggs within itself and by improving its services to its consumers.”
“To achieve these, Ministries, Departments and Agencies (MDAs) of government (including NAICOM) must shade their old ways. You must imbibe good corporate culture, shun corruption and reinvent yourselves.”
She warned against waste of government resources, “Old ways of public waste and inefficiency must be put behind. Government agencies, particularly in the financial services sector that have become centre of waste and corruption must look inwards to correct attitudes and culture to work. As public servants there is an expectation on you to be productive, efficient and incorruptible.”
“Insurance industry is an industry that is known for mobilising funds, by that activity of insurance industry they can improve the economy. This is because in any economy if we succeed in mobilising resources particularly fund you will find put that there will be opportunity for more investments and opportunity for more spending so naturally the economy improves.”
He said insurance industry should put in more effort at mobilising fund
NAICOM as an organisation will be expected to make efficient use of the financial and non financial resources available to it. In this regard, my Ministry will be looking to see a strategic, efficient and effective mobilization, allocation and use of public resources, fiscal discipline, transparency, integrity and accountability through timely reporting, monitoring and auditing across all its agencies.”
The regulation backing the scheme is contained in Section 4(5) of the Pension Reform Act 2014, which states that the employer shall maintain life insurance policy in favour of the employee for a minimum of three times the annual total emolument of the employee.
Welcoming the various cadres of staff of NAICOM, the Commissioner for Insurance, Alhaji Mohammed Kari said the insurance industry has made frantic effort at recovering federal government outstanding premium owed to the companies.
Kari said that the commission is looking at reviewing federal government insurance policies to meet the desired requirement of present day insurance.
The CFI bemoaned that the existing insurance policies of the federal government did not have the inputs of insurance professionals hence the need to review them.
“The whole idea is to review the policies they have because we believe that those policies were developed without inputs from insurance experts and they seem not to have understood where we are coming from.”
On the effort the sector has made so far, Kari informed that the Commission on behalf of the sector has been reaching out to stakeholders of the industry including government Ministries, Departments and Agencies (MDAs) on imperative of prompt payment of premium.