Expert asks government to insure assets, pay premium
Concerned by government’s inability to honour promises in respect of insurance laws, particularly in insuring assets and paying premiums, stakeholders in the industry have renewed the call on all tiers of government to obey the occupiers’ liability insurance of public building law and support the industry to carry the enormous risks in the economy.
The Managing Director/Chief Executive Officer, Anchor Insurance Company Limited, Mayowa Adeduro, who spoke to The Guardian in Lagos, said insurance business is the fulcrum in which all economic activities revolve. He said government has the primary duty as the greatest spender in the economy to support and encourage the industry to grow by insuring its assets and paying appropriate premiums as and when due.
Besides, the agitation may have been informed by reports that government agencies failed to provide profiles of insurance in the ministries, parastatals and agencies to the National Insurance Commission (NAICOM), as adviser of government on insurance issues.
He argued that government has not obeyed Section 50(1) of the Insurance Act 1003. This law stipulates that “the receipt of an insurance premium shall be a condition precedent to a valid contract of insurance and there shall be no cover in respect of insurance unless the premium is paid in advance. Invariably, it presupposes that any insurance company shall grant no insurance cover without having received the premium.”
Operators noted that government has consistently disobeyed this law, showing a disregard for the law it had made, and a poor example to the insuring public on the importance of insurance in the economy.They maintained that there is a need for government at all levels to support the industry, saying that government should show interest in the insurance business through financial inclusion, and promises have to be properly allocated with funds to pay for government insurance cover.
In his remarks, Mayowa Adeduro, said government remains the biggest spender in the economy and invariably the highest contributor to the premium income of insurance companies, adding that government has a role to play in the development and growth of the insurance industry.According to him, the industry earnestly need the support and encouragement of government at all levels, to sensitise the insuring public on the importance of insurance in the economy, through the insurance of its assets and properties spread all over the country.
The traditional role of insurance business all over the world is to provide security to other sectors of the economy to take more risks, as insurance remains the best risk transfer mechanism.For the industry to play this role effectively, he said: “we need the support of everybody, government, public and private entrepreneurs because insurance provides the peace of mind at any circumstance.
“We want to commend the Commission for the effort they are making to enforce compulsory insurance in the country, particularly the government agencies because government’s attitude towards insurance of assets and payment of premium has remained a challenge.”
Another operator, who spoke in confidence lamenting the attitude of government on insurance business, said: “The issue is worrisome in view of the fact that government is the prime mover of the economy and the biggest insurer. Therefore, the industry expects the support of government to enable it play its traditional role of risk bearer in the economy.
“Over the years, government had not been a faithful business partner when it comes to the issue of paying insurance premium, and insurance is a business of utmost good faith which necessitates prompt payment of claims to policyholders and make good returns to investors. The government should look at this issue seriously in the interest of industry and economy.”
The Nigerian Insurers Association (NIA), however, has taken steps to win support and respect for the industry. A source argued that to achieve its mission and objectives as a group, it has become imperative to take deliberate steps towards closer interaction and strategic partnership with all stakeholders, particularly the major arms of government – the executive, legislature and judiciary.
“The Council will consider seeking audience with the Presidency to table issues such as the role of insurance to the socio-economic growth and development of the nation, the need to give the industry the opportunity to contribute to the formulation of certain government policies and industry representation in appropriate government committees.