The National Insurance Commission (NAICOM) on Friday granted an operational license to NPF Insurance Co. Ltd, as a general insurance company.
This development enables NPF Insurance to commence general insurance operations in Nigeria, having successfully fulfilled all registration requirements.
Olusegun Ayo Omosehin, commissioner for Insurance handing over the license to NPF Insurance Co. Ltd in his office in Abuja congratulated the company for meeting all the necessary regulatory standards, and expressed confidence in NPF Insurance’s potential to contribute to the development of the industry.
Mohammed Kari, one time commissioner for insurance and a major player in the Nigerian insurance industry, had raised an objection against the licensing of NPF Insurance Company Limited by the industry regulator, NAICOM.
Kari, who is currently occupying a traditional stool as the Wazirin Bauchi, conveyed his position in a letter dated 25th July 2024 addressed to commissioner for insurance/ CEO of NAICOM and copied to the minister of finance; chairman of the National Insurance Commission; chairman of the Senate Committee on Banking, Insurance and other Financial Institution; chairman of the House Committee on Insurance and Actuarial Matters; director-general of the Bureau Of Public Enterprises, and chairman of the Nigerian Insurers Association.
He said, “I am writing to formally object to the registration of the NPF Insurance Company Limited, and my objection is based on several critical concerns that I believe warrant serious consideration.”
NAICOM had in an advertorial in some national newspapers said it has received an application from The NPF Insurance company Limited for registration as an insurance company to transact insurance business in Nigeria.
It said “In fulfilment of the statutory provisions of extent laws for the registration/licensing of insurance companies, the general public is hereby informed that the Commission has commenced the process of registering the company. Members of the public are requested to submit/report any objection or otherwise against these registrations to the Commission within 21 days from the date of this publication, please.”
Mohammed Kari, who spent 44 years as a player in the insurance industry between 1979 and 2023, in his nine-point concerns said:
“The core operations of the Nigeria Police Force are fundamentally at odds with commercial activities. The primary mandate of the Police is to maintain law and order, not to engage in business ventures. Allowing the Police to operate an insurance company could lead to conflicts of interest and distract from their essential duties. The Police is a regulator of sorts, they cannot be enforcing the law on compulsory insurance and be a provider of Insurance. The temptation to force motorist to insure with their company will be irresistible.”
According to him, “The structure and ownership requirements stipulated by Nigerian insurance laws and Financial Reporting Council necessitate a level of expertise that is currently lacking within the nominated Board of Directors and the Police force. Another requirement is a spread in ownership to avoid undue influence on the company by one shareholder. The authoritative nature of the police and their potential representation on the Board of Directors could lead to undue interference in the management of the insurance company, compromising its independence and effectiveness.”
Kari also said, “The Nigeria Police Force Investments have a history of mismanagement, as evidenced by the numerous issues surrounding the Nigeria Police Pension Scheme. This history raises significant doubts about the ability of the Police to effectively manage an insurance company, which requires a high level of expertise and know-how.”
“The fragmentation of the insurance business would result in the loss of valuable data and income for the industry. The entry of the Nigeria Police into the insurance market could disrupt the existing ecosystem, leading to inefficiencies and potential data loss that could harm the overall industry.”
“In case they are floating the idea of a captive, I don’t believe the Nigeria Police Force has enough business spread or expertise to support the survival of a captive company neither do they have the reputation to attract independent business. This would expose public funds to unwarranted loss.”
He also noted that, “The command-and-control nature of the Police force would make them take offence of a caution by a regulator. I don’t see how the Police can operate under someone’s regulation, for they would not accept commercial directive, and neither would they observe regulatory control. It would compromise the authority of the regulator if one company is seen to ignore regulatory control or out rightly disregard them, the regulator would lose his authority to regulate the market.”
“When I was an operator and their Insurer, the NPF as a consumer had detained a Head of Department and I, the CEO when we rejected to pay for a loss that was not insured on their policy. Can the CEO of an NPF Insurance Company refused to pay any demand of his owners, whether insured or not?”.
“When I was a regulator, the NPF as a consumer, have requested on many occasions to obtain waivers to bypass the Nigerian Insurance Industry to place their businesses directly abroad, and on all occasions, we have refused them. (These requests were made against the advice of their Broker and Insurer) I can just imagine what they would do as a registered Insurance Company.”
“Approving this application could set a concerning precedent. It may encourage other government agencies, such as the Federal Road Safety Corps, Nigeria Customs Service, Nigerian Army, Navy, Air Force, Nigeria Civil Defence Corps, Office of the Head of Service of the Federation and others, to seek similar licenses. (And why not?) The Commission can therefore not refuse them. This proliferation of government-run insurance companies could undermine the integrity and stability of the insurance sector and reverse the government policy of divesting from business, which as you remember was the reason of the creation of the Bureau for Public Enterprises (BPE). I suggest you seek the opinion of the Bureau as you continue with your consideration.”
On the advertorial, NAICOM had listed board members of the would-be NPF Insurance Company Limited to include: Oke Temitayo, managing director/CEO; Adenaike Olufemi Adebowale (AIG Rtd); Ekechukwu Mac; CP Sulaiman Muhammad; CSP Ameh Lydia; CSP Adedeji Adewole Julius; Amore Olusola Emmanuel, CP. (Rtd); Rev.Paul –Odeli Joshua; Balogun Oluyinka Abayomi; Akinwunmi Tunde Olufemi; and Musa Ba’aba Ibrahim.
Kari strongly urged NAICOM, based on these concerns, to reject the application for the registration of the Nigeria Police Insurance Company Limited, noting that it is imperative to maintain the focus of the police on their primary responsibilities and to ensure that the insurance sector remains managed by entities with the requisite expertise and independence.
Mohammed Kari is active player in the Nigerian Insurance industry from 1979 to 2023. In this period, he was the managing director/CEO of Nigeria Reinsurance Corporation and NICON Insurance Plc and later the commissioner for insurance/chief executive of the National Insurance Commission (NAICOM).
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