NAICOM set to hire consultants for industry reforms

Three are to be approved for appointment to implement the reforms of the three areas penciled for such in the industry.

If the consultants effectively implement the reform articulated by the commission, the sector is expected to witness a leap from its current state.

The commission is focusing on three areas for a start and they include general insurance, information technology and the actuary services of the industry.

The choice of consultants to drive the reform process may have been prompted by the report of the Bala Zakariyau led 11-man panel that reviewed the recently concluded recapitalisation exercise of the industry and the state of NAICOM in 2007.

The panel discovered that the commission being a specialist service regulator lacks adequate technical and professional staff to discharge its core functions.

The rationale to reform and drive the general business is informed by the prevalent of fake insurers whom are ridding the sector of huge resources from motor, building and other areas of insurance businesses.

In the area of motor insurance, fake insurers, it was learnt, have colluded with officials of Vehicle Inspection Office (VIO), who recommends them to unsuspecting vehicle owners. And because of the price they charge which they alleged VIO officials get commission from, they are always a first choice over the genuine insurers.

Also is the World Bank’s report of the number of houses through which the industry could derive income from on annual basis if they restructure their business and drive away fake insurers from the sector.

Fola Daniel, Insurance Commissioner, confirmed the state of the industry reform and noted that some consultants have been interviewed and nine short listed and passed to the finance ministry for further scrutiny to scale them down to three for the reforms.

"The three consultants to be appointed have specific jobs to do. One is for general business, another for information technology and the third will drive the actuary business of the industry".

The consultant for IT will evolve a new platform for easy interface between the regulator and the operators while the one for actuary will provide the commission with the best tools to monitor operators’ solvency generally.

"Monitoring for solvency is a new model for risk based management in the industry and it is being used by insurers in advanced economy’.

He noted that the commission has scrutinized some sections of the insurance act which will bring huge income for the industry and these sections will be the fulcrum on which the consultant for the general insurance business will work.

"The commission will shape the industry for the operators to make more money because of the opportunities under sections 64 and 65 of the insurance act. Also the World Bank in its report has identified that we have at least 10.4 million houses that can be insured for huge resources".

Sections 64 stipulates that: No person shall cause to be constructed any building of more than two floors without insuring with a registered insurer his liability in respect of construction risks caused by his negligence or the negligence of his servants, agents or consultants which may result in bodily injury or loss of life to or damage to property of any workman on the site or of any member of the public.

Section 65 states that "Every public building shall be insured with a registered insurer against hazards of collapse, fire, earthquake, storm, and flood.

Contraventions of these stipulations attract sanction.

Daniel said the commission will collaborate with the Nigeria Police service to drive away fake insurers from the industry.

Activities of fake insurers have posed great challenge to the insurance industry which has lost huge resources to them. Several efforts have been made in the past to tackle them but which have not worked.