Deducting 50% insurance fund may lead to sector’s collapse – Expert

The imminent deduction of 50 per cent from the revenue of the National Insurance Commission (NAICOM) may affect efficient regulation of the industry, an expert has warned. An insurance expert and lead director of Transparent Protection Ltd (TPL), Dr Sam Chukwuka Onyeka, stated this Wednesday in Abuja at a press conference where he noted that […]

The imminent deduction of 50 per cent from the revenue of the National Insurance Commission (NAICOM) may affect efficient regulation of the industry, an expert has warned.

An insurance expert and lead director of Transparent Protection Ltd (TPL), Dr Sam Chukwuka Onyeka, stated this Wednesday in Abuja at a press conference where he noted that NAICOM is the regulatory body for the insurance industry in Nigeria and not an enterprise and revenue yielding agency of the federation, as it has been wrongly categorised.

“The commission is funded by the insurance industry through payment of statutory supervisory levy. This argument also applies to other regulatory bodies in Nigeria which are funded by the private sector.

“Accordingly, the federal government should consider exempting NAICOM from the application of the 50 per cent automatic deduction from internally generated revenue of government-owned enterprises as Section 62 of the Finance Act 2020, which amended Section 22 of the FRA 2007, made room for exemption, through the Minister of Finance and the National Assembly,” he explained.

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Onyeka added, “In the event that no exemption from the policy can be obtained, then, let the policy be limited to NAICOM’s Operating Fund, while the Education Fund and the Security and Development Fund should be spared. This will guarantee a relatively well-supervised and healthy insurance sector in Nigeria.

“If otherwise should be the case, then Nigeria must brace up for a new wave of insurer insolvency and eventual collapse of the sector for weak and inadequate supervision,” he further stated.