The name Fola Daniel is one that would occupy a prime place in the annals of history in insurance sector and the financial services industry in Nigeria, not just for being the commissioner for insurance but for his courageous determination to bring about change no matter who stands the way.
He is pursuing a course that is targeted at growing a sector where professionalism and ethical practice among players is critical, for consumer protection and confidence building.
Today, no insurance company could afford not to pay genuine claims and remain in business, and this has taken the insurance sector to another level.
The challenge of premium receivables which slowed down the insurance sector’s contribution to the economy for many years is almost a thing of the past with the enforcement of “No Premium No Cover” policy by the Commission and this has resulted to growing liquidity of the industry in the last one year.
Lobbying and politicisation of government accounts by operators as a result of unhealthy competition resulting in poor growth is becoming a thing of the past, as NAICOM now manages allocation of those accounts among participating companies according to their strength, for greater value.
Most importantly, the balance sheets of companies have become more healthy and realistic, and can compete effectively with their counterparts in other jurisdictions.
This is even as NAICOM continue its market development initiatives code named: Market Development and Restructuring Initiative (MDRI), which includes the different compulsory insurances, microinsurance, Takaful, Agency system among others targeted at increasing market penetration and enhancing the sectors contribution to the nation’s GDP.
Fola Daniel is now a name every operator ruminates over because actions and inactions have got good prices, so practitioners’ watch their back before acting.
To Fola Daniel, “things must be done the right way” and operators who share the same vision have not ceased applauding his charismatic courage to correct the wrongs, which have for many years kept the industry behind.
“Daniel has done a great job for the insurance industry. If we can have two of him as regulator going forward, insurance will take its right of place in the country’s financial services sector.”
The decision however to change the tide of insurance regulation was actually handed down to operators at the 2010 Professionals’ Forum in Ibadan, Oyo State through an address.
In retrospect, below are some highlights of the Commissioner’s speech on that occasion:
“I will like to seize the opportunity afforded by this gathering to chronicle some of the disturbing malpractices in the market:
“With respect to market conduct, there is an urgent need to address the challenges posed by improper conduct. Unarguably our products are underpriced and serious undercutting by operators that reached its climax with the recent Federal Government’s Group life cover.”
“Much more serious acts of indiscipline were displayed with respect to the Group life cover. Right from the response to the invitation for bids, a lot of our members could not demonstrate good corporate citizenship as they were unable to produce published accounts or valid tax clearance certificates. Some brokers even applied without valid licenses, while others attempted to trade with only the CAC registration, but for the vigilance of the commission.
“As if this tendency to criminality was not enough, some of our colleagues did all they could to get appointed, their incapacities notwithstanding as if the Public Procurement Act should not be followed or did not apply to insurance contract in any way.
“When that failed, some resorted to blackmail soliciting the help of politicians to frustrate government policy. They wrote spurious petitions to intimidate government into appointing them to participate in the scheme. As if Newspaper publications were not enough, they got the legislature to conduct unnecessary public hearings in attempt to intimidate the executive branch of government.
“Suffice to say the cost of these misbehaviours to us is enormous – loss of business, diminished goodwill and confidence of the insuring public.
“Brokers were not left out of these ignoble acts. Those participating in the consortium of brokers for portfolios acrimoniously sought to increase their share to the detriment of other members, a subsisting appointment notwithstanding. The Commission was compelled to intervene on a number of occasions in what ordinarily should be a business practice, to restore sanity.
“The violation of a market agreement reached by all insurance companies following the Ijebu Ode retreat was saddening as it resulted in the abortion of an excellent attempt to self regulation and discipline by the operators.
“Even before the ink with which the agreement was written had dried, a portfolio that a group of companies had underwritten and the cover running, was purportedly poached by another company, without just cause.
“In spite of the agreement to “Consult the Lead” the client was encouraged to transfer the business without payment of premium by our colleagues. The ridiculous thing was that the latter cover was just to run for the remaining 45 days of 2009, with no offer to renew thereafter.
“We cannot continue in this path any longer. There must be a change of attitude and behaviour amongst practitioners. We cannot continue to do the same thing all the time and expect a different result. The future is bright for the industry if only we could be more professional in our approach to the business.
“In order to stem this depravity, the Commission will upscale strict enforcement of the provisions of the Insurance and NAICOM Acts 2003 and 1997 respectively relating to market behaviour.
“I therefore enjoin operators to adhere to the tenets/ethics of our profession and enable general harmony needed for effective delivery of better insurance service and its penetration to our teeming populace.”
By: Modestus Anaesoronye