NAICOM ‘ll publish names of insurance companies who fail to pay outstanding claims – Thomas

Mr. Olorundare Sunday Thomas is the Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM). In this interview with Daily Trust, he speaks on the regulatory steps the Commission is taking on non-settlement of claims as well as the activities and operations of the insurance sector By Sunday Michael Ogwu & […]

Mr. Olorundare Sunday Thomas is the Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM). In this interview with Daily Trust, he speaks on the regulatory steps the Commission is taking on non-settlement of claims as well as the activities and operations of the insurance sector

By Sunday Michael Ogwu & Philip Shimnom Clement

What are you doing to address nonpayment of claims by insurance companies?

As part of our regulatory mandate, the National Insurance Commission (NAICOM), will not waste time to sanction all insurance companies who fail to pay outstanding insurance claims.

Already, NAICOM said it has directed all insurance companies to commence publications of all outstanding claims in their records because some of them do not have full documentation which is not appropriate as companies are expected to settle their claims naturally.

We have also said it that there would be consequences for disobeying the Commission’s directive in that regard, one of which will be naming and shaming the defaulting companies because we are doing a lot to ensure insurance companies live up to their responsibility as regard payment of claims,”

What is your assessment of the sector after the floating of the exchange rate

Of course, it has had an impact as asset replacement is now becoming an issue and when you get to a position where assets you acquire at a particular amount and now change, the immediate result is that people are not quick to revalue their assets.

Where there is inflation, life insurance is worst hit because the value of claims is badly affected. But by the time the entire initiative is completed, we may see a downward trend in the local currency. So, for those that are smart, they have to adjust the value of their assets

We also call on the public to revalue their assets due to the rising inflation so as to have claims that meet the present cost of assets and also manage their risks through insurance, especially now that the cost of replacement of lost or damaged assets is very high.

What is the state of micro insurance?

The performance of Microinsurance is increasing from available records both from the supply side. From the microinsurance companies, what we have seen is an increase in patronage of low income earners and other informal organizations to join the market.

Recently, the key players who are main insurers are now also interested in micro insurance as we have received applications for window operations from insurance companies. Although there are no new products. There are a few challenges but the main challenge is networking as the infrastructure is not there due to the security situation to meet the rural areas so the investors will prefer to work in the urban areas.

We do everything possible to make insurance available and we have licensed additional microinsurance companies and products and we have seen a lot of improvements, especially in terms of numbers and we have a dedicated unit whose primary responsibility is to promote micro insurance and takaful institutions

What is the update on the consolidated insurance bill and how will it impact the operations of the industry?

We couldn’t get it signed during the last administration because the president couldn’t assent. However, the national assembly is looking at again, It has gone through the first reading and we are looking at how we can be able to conclude it as soon as possible. We have high hopes and we know the bill is a game changer and we are preparing ourselves.

Notably, there is a section in the bill that even addresses the issue of recapitalisation. However, companies are now willingly writing to us showing us evidence of an increase in capital. What we will be left with is individual company’s capital needs for transactions which will be dependent on the risk that the company is carrying.

The status of some insurance companies has remained unclear and there are speculations, are we going to see some direct intervention by the commission in the ownership?

Some of these companies now have new investors who have put money into it due to our intervention. For instance, IGI Insurance has a new investor and currently, the company is being restructured. IEI also has the same situation and is also going through restructuring. However, there are still issues with some of them which we are trying to resolve. The law has also made provisions for companies to be given time to address their liquidity positions.

Is it possible to have the commission publish the status of insurance companies on a monthly basis?The status of insurance companies can only be made available on a summarized basis because as a regulator, any announcement that comes from you, stakeholders and the general public can run with it and use it against the company.

So if a company is having any challenge it can recover from and it now comes into the public space, you are risking the company. This is why regulators like CBN, cannot mention any liquidity position of any bank when they know they can recover.

What is the impact of motor insurance on the industry especially as it has increased from N5,000 to N15,000

The N5,000 has been the fee for so many years which could no longer be sustainable, hence the upward review of the price. There are a lot of commendations from underwriters and it is just eight months. The issue of N 15,000 has come to stay. 7 months is too short to access the impact but the sector is already adopting to it. There are benefits of up to N3 million and more that comes with the third-party motor insurance because many people are also thinking of what is coming out from their pocket and not thinking of what they will not partake in.