The insurance regulator, National Insurance Commission (NAICOM) will open a new office in Ogun state before the year runs out as it expands to 12 states in a move that will put more levies on the over-burdened industry.
The commission’s office in Ogun will be the first to start operation in its move to maintain presence in additional 12 states in the country.
Plans are in top gear to open the office before the year runs out according to Rasaq Salami, the commission’s spokesperson who hinted of collaborative efforts between the regulator and the state government.
Although the commission said the idea to open additional offices was to deepen industry’s penetration, operators argued however that such move will increase levies on the industry to fund the overheads expected from running offices in additional 12 states.
The commission currently has its head office in Abuja while its control office is in Lagos. In addition to these are four zonal offices in Port Harcourt, Kano, Ilorin and Enugu and If the plans to open additional offices is concluded, the insurance regulator will have a total of 18 offices across the federation.
The commission does not draw funding from government but from the industry and an expanded responsibilities has deepened fears of more levies on the operators.
The insurance regulator is funded by the one percent levy from the gross premium recorded by the operators and the new amendment of its law has jerked it up to at least one percent fueling speculation that it the commission could raise up the levy whenever it feels so.
Between last July and current date, the operators have been pressured with several fines and sanctions which have increased the commission’s earnings.
Several companies have been sanctioned for varied forms of infraction between July 2015 and June 2016 with the brokerage arms of the industry being the worst hit.
Over 100 brokers have exited the sub-sector within the period.
Sanctions are applied to correct anomalies but operators noted that arbitrary charges are killing and affecting business operations.
The series of fines and sanctions on the industry in recent times have forced the operators to make comparison between the administration of the former insurance commissioner, Fola Daniel and the current, Mohammed Kari with the conclusion that the former had been better and his approach more purposeful in deepening the industry’s growth.
NAICOM’s spokesperson, Salami played down the fear of more charges but also admitted that more levies could come.
“Opening additional offices will not cost a lot” but pointed out that “levies may go up because of increased responsibilities”.
The idea behind the 12 additional offices according to Salami was to further the Market Development Restructuring Initiatives (MDRI evolved during the administration of former insurance commissioner, Fola Daniel.
“The MDRI started with the former insurance commissioner as a vehicle to enforce vehicle and building insurance. We are only trying to take it further by collaborating with state governments”.
Vehicle licensing offices where third party insurance are procured and building approvals secured are under the ambit of state governments. Although there are national laws that regulate these, they are however not enforced.
“We have to be present in states to make them see reasons for the enactment and enforcement of these laws” Salami said.
“The offices in states requires little or no funding because we have discussed with state governments for accommodation and they are obliging”.
For instance, Ogun state government has assured the commission of an office space in addition to a plot of land to build its office in the state.
“The state will be part of its operation and drive it together with the commission’s officials who will be drafted from the zonal offices, according to Salami, the commission’s spokesperson.
“We expect the Ogun office to be ready before December and we will move in immediately to commence operations ” as he enjoined operators to use the windows to grow their earnings.
He informed that the commission is also looking to interests from six states to partner with it on this initiative which aimed at developing the insurance market.
A member of the insurance committee in the House of Representatives viewed the current development in the industry which has seen more charges with mixed reactions.
“Evolving strategies to increase earnings into the government’s purse is a welcome development but it becomes killing and the government will frowns at it when the charges are arbitrary’.
He drew attention to the current economic hardship in the country and noted that regulators and government agencies ought to consider this in taking action so as not to pressure companies into closing shops through multiple and excessive charges.
“We have received several complaints from the industry about alleged over highhandedness from the commission and we have tried to meet the regulator on these but it insisted that its actions so far had been based on the law”.
‘The industry will be better if the laws are implemented with human face”, he said.
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