‘Insurance industry bill 2020 to create 1m jobs’
The Insurance Bill 2020, if passed into law, will create over one million new jobs to boost economic prosperity.
Speaker of the House of Representatives, Hon. Femi Gbajabiamila, stated this at a public hearing on Insurance Bill 2020. He noted that the jobs would be created through the insurance agency system, among other reforms, expected to come with the passage of the bill into law.
Stating that the regulatory reform will equally increase the Gross Written Premium (GWP) and total assets of the insurance industry, he said: “To achieve our dream, modern insurance legislation, international best practice requirement should, as much as possible, be matched with local circumstances.
“I am convinced that history is about to be made as we are set to enact a robust regulatory framework for insurance regulation and supervision in Nigeria that meets local circumstances and complies with best international practices standards.”
Speaking on the need to review the Insurance Act he said despite having the advantage of a huge population of over 200 million, the sector’s contribution to the GDP has remained at roughly one per cent.
“At the same time, less than two million Nigerians have any form of insurance policies. Going by the latest industry report, in 2019, the sector’s Gross Written Premium Income (GWPI) was slightly above the U.S $1 billion and total assets N1.8 trillion. These figures only paint a dismal picture of a sector struggling to scratch the surface in comparison with the infinite potentials of the sector,” he pointed out.
Similarly, the Chairman of the House Committee on Insurance and Actuarial Matters, Darlington Nwokocha, stated that it is important to expand the reach of insurers and intermediaries in Nigeria, adding that some states, especially in the north, have neither access to insurance companies nor intermediaries.
“It might be necessary to liberalise the insurance licensing regime to increase the ratio of insurers and intermediaries with the population. Also, licensing more insurers and intermediaries has the prospect to create employment for the teeming youthful population, whether as professionals or as casual workers. In particular, newly discharged corps members can take up initial jobs as insurance agents and may even consider making a career in the insurance industry.
“Having taken time to study the insurance Act 2003 and other pieces of insurance legislation in Nigeria, we can confirm that much of the provisions of the insurance laws are out of tune with modern realities.
“In particular, the sanctions regime is weak. In some cases, as with the Motor Vehicle (Third Party Insurance) Act 1945, the prescribed fines are stated in pound sterling instead of Naira. Also, the amounts stated as fines in the various laws are grossly insufficient. Some provisions prescribed something as low as N2 and N5 respectively. In the modern time, the philosophy of penal punishment advocates effective and dissuasive sanctions.”
Meanwhile, the managing director/Chief Executive Officer, Sunu Assurances Nigeria Plc, Sam Ogbodu, at an industry forum said, the current insurance regulations are obsolete, making their enforcement difficult for the regulator and the law enforcement agencies. The new bill, if passed into law, he said, would ensure insurance defaulters are prosecuted to send a signal to those who might be planning to evade insurance.