NAICOM, others intensify enforcement of public building insurance
The National Insurance Commission (NAICOM), Nigeria Insurers Association (NIA), and Federal Fire Services (FFS), have agreed to embark on the enforcement of insurance of public buildings nationwide, and sanction the owners of buildings classified as such without proof of insurance coverage.
According to the Insurance Act 2003, a public building is any building that is not 100 per cent used by the owner for residential purposes. Public buildings include tenement houses, hostels, residential buildings occupied by tenants, lodgers or licensees, and any other building to which members of the public enter and exit for the purpose of educational, recreational or medical services.
The three agencies resolved that henceforth, insurance companies should clarify in their returns the premium they make in insurances of public building in line with the provisions of the Section 65 (4) of the insurance Act 2003. The section provides that the insurance companies would support the Fire Service with part of the premium paid to fire underwriters for protection against fire disaster.
The Commissioner for Insurance, Mohammed Kari, who announced the effective commencement of enforcing the insurance of public buildings, said henceforth, the implementation would be enforced by the Fire Services, which is empowered to demand from any public building owner the proof of fire insurance coverage.
He said with effect from date, sensitization would be carried out to ensure that nobody is left in doubt of which building or premise is classified as public building. “Failure to respect the law will be dealt with severe consequences by the enforcement agencies, which will be in this case, the Fire services,” Kari said.
On his part, the Comptroller General, Federal Fire Service, Mr. Anebi Joseph Garba, noted that fire had caused a lot of havoc nationwide, adding that most of the edifices affected by fire disaster had no fire insurance covers.
He cited that Section 48 and 89 of the National Fire Code empowers the Fire Service to carry out risk assessment of any public building and to demand for insurance certificate.
Garba expressed optimism that if this coverage is implemented, there would be more funds coming into the insurance sector. He however, regretted that in some states, the FFS lacked logistics such as utility vehicles, to move around to inspect buildings and enforce insurance coverage.
The Chairman, NIA, Eddie Efekoya, said the development marked a milestone as far as protection against fire disaster was concerned. While noting that it had taken almost 14 years before the implementation of Section 65 (4) of the Insurance Act 2003, he said the association supports the implementation being championed by the NAICOM.
He said: “Insurance can compensate materially but really cannot compensate the trauma we all get from it,” adding that the waste in terms of the money spent for compensation or reconstructing the destroyed building would have been channeled to other profitable ventures.
He assured that once the template for the implementation is ready, the Association would contribute its quota to ensure its success.
Frustration of compulsory insurance
Eight years after the launch of the six compulsory insurance policies nationwide, insurance industry operators are still grappling with the enforcement.
Indeed, the industry is still very far from realising the objective, which is to ensure that Nigerians are compelled by law enforcement agents to patronise these compulsory insurance policies with the overall objective of getting more Nigerians into insurance net and increase the industry’s premium income as well as the its contribution to the Gross Domestic product(GDP) of the economy.
The compulsory insurance policies are those classes of insurance made compulsory by law, with the objective of providing protection to third parties and the general public.
Builders Liability – under the Insurance Act 2003/under the Lagos State Building Control Law 2010; Occupiers Liability – under the Insurance Act 2003 and Lagos State Law; Employers Liability – (Group Life) – under the Pension Reform Act 2004; Employers Liability – under the Workmen’s Compensation Act 1987;
Healthcare Professional Indemnity – under the NHIS Act 1999 and Motor 3rd Party Liability – under the Insurance Act 2003.
Builders Liability Insurance requires that all owners or contractors of buildings under construction that are more than two floors must purchase insurance cover to provide compensation in event of bodily injury, death and property damage to workers at construction sites and affected members of the public in the event of collapse of the building and other construction risks.
The Occupiers Liability Insurance requires that all owners or occupiers of public buildings, whether private or public, should provide the insurance cover under the National Insurance Act 2003 and the Lagos State Building Control Law 2010.
Employer’s Liability or Group Life Insurance requires that all employers of labour with more than three employees provide insurance cover for them as required by the Pension Reform Act 2004. The penalty for non-compliance with this law is N250,000, record of conviction, and in addition the place of business may be sealed up.
The Healthcare Professional Indemnity Insurance is the policy that stipulates that all licensed healthcare providers and medical practitioners such as doctors, nurses, pharmacists, etc should provide insurance cover under the National Health Insurance Scheme (NHIS) 1999.
The law stipulates that they should have insurance that will protect their patients in case of accidents or fatalities (death) resulting from professional negligence. This type of insurance provides compensation to patients and their relatives in the event of involuntary murder, disability, shock and injury suffered by patients as a result of the negligence of healthcare providers. The penalty for non-compliance with this law is a possible revocation of license by the National Health Insurance Council.
The third party motor liability insurance requires that every motor vehicle user should insure the motor vehicle against liability as to death, bodily injury or damage to property of a third party arising from the use of the vehicle. The penalty for non-compliance is a fine of up to N250, 000 plus one-year imprisonment.
Enforcement of these insurances was one of the objectives of NAICOM in launching its Market Development and Restructuring Initiatives (MDRI) in 2009.After the MDRI launch, NAICOM also launched the compulsory insurance policies in the six geopolitical zones of the country.
The launch witnessed many activities by the industry players and the regulator such as road shows, posters, distribution of hand bills and other means of advertisement and awareness campaigns. But despite all these efforts, the industry is yet to achieve its objective in this regard.
Indeed, pushing of the retail insurance from all sense of judgment is becoming a lot easier for the industry than the enforcement of the compulsory insurances.
Recently, both the immediate past chairman of NIA Mr. Godwin Wiggle and the president of the Chartered Insurance Institute of Nigeria (CIIN) Mrs. Isioma Chukwuma, said enforcement of the compulsory insurances has remained the greatest challenge to the industry.
This is so despite the all-important nature of the compulsory insurance policies to the third party. For instance, builders have refused to patronise the Builders Liability Insurance and Occupiers Liability insurance whereas cases of collapsed buildings that have killed workers at construction sites and public buildings that collapsed killing the occupants abound in different parts of the country.
Dependents of victims of these unfortunate incidents are often left uncompensated. The third party Motor insurance which is the only one enforced by the law enforcement agents is often bought with the spirit of fulfilling all righteousness, as such, the buyers often buy from fake insurance operators for the purpose of crossing police check points .
The insurers, in order to guard against this, introduced the Nigerian Insurance Data base (NIID) with the aim of checkmating the activities of the fake insurance operators.
Despite this, recent report said that about 12 million vehicles ply Nigerian roads with fake insurance certificates. The result of this is on overall premium generated by the industry which year in year out falls below expectation while the industry’s contributions to the national GDP remain static.
For instance, during the official launch of the Builders Liability insurance, insurers had projected that if well implemented, the policy alone would generate N10 billion premium annually for the industry.
But three years after, statistics released by NAICOM on premium from the compulsory insurances said that insurance in 2012, earned N28.68 billion from all the classes of compulsory insurance policies.
Even today, there has not been significant improvement just as enforcement of the compulsory insurance policies has remained a major challenge to the industry operators. Mr. Wiggle confirmed that the greatest challenge to the industry operators has remained enforcement of compulsory insurances.
Wiggle, said recent report on 12 million vehicles plying Nigerian roads with fake insurance certificates is an indication of how much the industry loses to the fake operators as well as how much revenue government at all levels lose to them.
He regretted that one of the things that make fake insurance operators to thrive in their business is because Nigerians like short cut in doing things, adding that those who patronise them are Nigerians who do not want to follow the right channel in doing things.
He urged Nigerians to ensure that they get their insurance services through the right channels because the fake operators will have nothing to offer to them in the event of claims.
He also advised government to play its role in this regard, pointing out that although the insurers are doing their best in pushing the compulsory insurances like the third Party Motor Insurance which they do through Nigeria Insurance Industry Data base(NIID), government, has a big role to play in enforcement of other compulsory insurances.
Wiggle, said ’’More and more Nigerians, now make effort to buy the third Party Motor insurance from genuine operators because the Road Safety officials are enforcing it in different states with heavy fines on defaulters.
He said if a number of state governments industry operators have approached for enforcement of builders insurance will take responsibility of enforcing it for security of lives and properties in their states, more Nigerians would patronise the policy.
On her part, Mrs. Chukwuma stressed the need to implement the compulsory insurances nationwide, saying the industry has lost a lot on account of the non- enforcement of the policies.
She said against this backdrop, the institute has embarked on awareness campaign in order to create awareness among Nigerians.
The Insurers Committee, at its June meeting, said it has taken decision to embark on rebranding of insurance industry with the youth as their main target.
Lagos state unveils plans to create Health Insurance scheme
The Lagos State Government on Wednesday said plans are underway to create an agency to manage the State’s health insurance scheme. The scheme is expected to be rolled out soon. Lagos state Commissioner for Health, Dr. Jide Idris, confirmed this to state house correspondents at the end of a meeting with the AXA Mansard Insurance Group.
Idris said the government would ensure every resident in the state could take part in the scheme.
He said the AXA Mansard Insurance group will partner with the State Government to deliver affordable and quality health care service to the people and transform the State into a medical tourism centre.
“They (Mansard Group) have expressed their interest to partner with us on our health insurance scheme which we are rolling out very soon. It is a financing scheme for the system and a way of introducing reforms, re-jig the system and make it better.”
“We have provided that enabling environment in the sense that we are going to have an agency by law and every resident of Lagos is going to contribute to that purse. We will be using both public and private health providers and that is where AXA Mansard comes in with healthcare facilities.”
In his remarks, Chief Executive Officer of Mansard Insurance, Mrs. Yetunde Ilori said the firm would support the government by creating Primary Healthcare Centres (PHCs) and health care facilities across the state.
Mansard’s Chief Client Officer, Tosin Runsewe said the courtesy visit to Governor Ambode, apart from the partnership on healthcare delivery, was also to show appreciation on the efforts made by the government to ensure that the state is safe and secure for business investors.
FG clears N54bn accrued pension benefit backlog
Finance Minister, Mrs. Kemi Adeosun said the Federal Government has cleared the inherited arrears of accrued pension benefit for the year 2014, 2015 and 2016 by releasing N41.5 billion to the National Pension Commission (PENCOM) for onward payment to the retirees.
A statement released by the finance ministry’s Director of Information Salisu Na’inna Dambatta, said the sum of N12.5 billion being outstanding for January, February and March 2017 has been settled based on 2016 appropriation, bringing the tally to over N54 billion.
“Despite conflicting demands for available cash, President Muhammadu Buhari has always expressed concern about the plight of workers and pensioners.
Consistent with this, we have released N41.5 billion which clears the arrears inherited from the previous administration relating to the period 2013-15 and
underpayments in 2016. This will bring relief to thousands of our elders who have served and deserve to be paid their entitlements promptly and fully,” Adeosun emphasised.
The N41, 566, 565, 184 billion released to PENCOM was the outstanding appropriated for the year 2014 and 2016 by the National Assembly for the settlement of the retirement benefits of Federal Government employees.
She explained further that “the amount we paid includes arrears and the impact is that those who retired as far back as 2013, who had been unable to access pension under the contributory scheme due to non-payment, will now be paid.”
To avoid future accumulation of pension arrears, Mrs. Adeosun assured that henceforth “the monthly allocation to the PENCOM based on the appropriation of
2017 will regularly be paid along with monthly salaries of Ministries,
Departments and Agencies (MDAs).”