NAICOM to sanction firms under-pricing products

THE National Insurance Commission (NAICOM) has warned underwriting firms, intermediaries under-pricing insurance products to desist henceforth from the unprofessional conduct, as it will not hesitate to cancel the licence of any insurance firm or broker caught in the act.

  The Commissioner for Insurance, Fola Daniel, addressing insurance correspondents at a seminar organized by the commission in Benin, Edo State, stated that disaster awaits such an insurance company if it failed to honour obligations on his insurance contract to the insured, as it has voluntarily undertaken to act unprofessionally. 

  He urged  journalist and operators to furnish the commission with confidential report, as the commission will investigate  and take appropriate action.

  The NAICOM boss said “We cannot continue in this path any longer. There must be a change of attitude and behaviour amongst operators. We cannot continue to do the same thing all the time and expect a different result.”

  The future is bright for the industry, he said, if only we could be more professional in our approach to the business of insurance.

  He said “The issue of overriding commission is like the Ten Commandments God gave to mankind, there is no how you preach about it, there are people who will still want to break the laws, the same is what we are experiencing in the industry. But are we warning them from breaking these rules? Yes, we are.

  For those of you who are regular at yearly general meetings, one of the things you hear them say is that NAICOM is imposing heavy penalties on them and it was also re-echoed in the press. I remember in one of the meetings I had  with  the insurance industry, I apologized and said though we have been slamming you with penalties but it has not stopped you from misbehaving. I promised them that  we will never do it again. I will like to say this, since NAICOM started as a regulator, we have never fined any insurance company N10 million bur this year, a company paid N62 million.

  He said “As people are becoming hardened, we are also restrategising on how to effectively deal with them. For any insurance company that may be complaining of N500,000 or N200,000 fine, we have promised them that we will not do it again rather, they will get N5 million, N10 million even multiple of that as fines so much that some Managing Directors will lose their job because if I am a shareholder and you make me pay N200 million to a regulator as fine, not tax there will be trouble”.

  According to him, if you are those who are breaking the rules, instead of complaining that companies are paying overriding commission, you are a friend of the industry, do your findings, we are not kill joy but if any company misbehaves, to such an extent that it became castrated that it cannot pay claims, please to whose interest? Then you can blow the whistle. As regulator, we have two eyes and there is none behind our  head; the best police officer or a detective cannot see everything but if you give us friendly information and blow the whistle for us  to work on, I think we ought to be on the same side when it comes to the issue of insurance industry. I must say, I don’t think payment of overriding commission is still wide-spread. 

  One of  the complaints  we received from the industry last year, he said,  was incessant inspection of their books because some significant companies were inspected up to six times  and this is because we want to know exactly what they are doing. If we see an expenditure of N5 million at a time,  you got big business, we interrogate to know what they might have done with the money and we will want to know its recipient. So that is how far we have gone. We are doing our best to ensure that we give the best to all our directives.