Business
Policyholders, receiver-managers clash over non-payment of claims
By AYOOLA OLAOLUWA
Thousands of policyholders of Niger Insurance Plc. and Standard Alliance Insurance Plc, which were liquidated in 2022 by the National Insurance Commission (NAICOM) have protested the non-payment of their overdue claims by the receiver managers appointed to take over control of the distressed companies and protect their assets from their directors.
According to the aggrieved policyholders, apart from refusing to pay them their claims, more than one year after they took over the liquidated firms, the receiver managers have also refused all entreaties by shutting the door against them.
It would be recalled that NAICOM, the regulatory body of the insurance industry, had on Tuesday, June 28, 2022, announced the revocation of the certificates of registration of Niger Insurance Plc and Standard Alliance Insurance Plc, effective from June 21 for unethical conduct.
“This is to notify all insurance stakeholders and members of the public that the National Insurance Commission (NAICOM) has cancelled the certificates of registration of Standard Alliance Insurance Plc, RIC – 091 and Niger Insurance Plc, RIC – 029 with effect from the 21st day of June, 2022.
“Consequently, the commission has appointed Sanya, Ogunkuade Esq of Plot 217, Upper Grace Plaza, third floor (left wing), Shettima Munguno Crescent, behind Julius Berger Equipment Yard, Utako, Abuja as receiver/liquidator for Niger Insurance Plc and Kehinde Aina Esq of Aina Blankson LP, 5/7, Ademola Street, SW Ikoyi, Lagos as receiver/liquidator for Standard Alliance Insurance Plc.
“All stakeholders are advised to forward their inquiries to the respective receivers/liquidators of each company for their necessary action”, NAICOM had stated in the statement announcing the revocation of the underwriters’ licences.
NAICOM also assured stakeholders, especially policyholders and shareholders of the companies, of the safety of their interests.
However, 15 months after their licenses were withdrawn, aggrieved policyholders of the two companies are on a collision course with their receiver/liquidators, Messrs Sanya, Ogunkuade Esq and Kehinde Aina Esq.
Some of the affected policyholders of the liquidated underwriting firms, who spoke to Business Hallmark at the weekend in Lagos, called on the Federal Government to intervene in the dispute by leaning on the receiver managers to, as a matter of urgency, offset their overdue claims, which they claimed runs into several billions of naira.
According to the affected stakeholders, made up of policyholders and retrenched workers, represented by Vera Ogulu; Eze Charles; Mack Ogbamosa; Dosunmu-Adeyemi Oluwatoyin and Abidemi Aladelola, among others, they had invested heavily in some of the products offered by Niger Insurance and Standard Alliance Insurance and were on the verge of getting paid at the maturation of their investments when things fell apart.
One of the affected policyholders, Mack Ogbamosa, called on relevant government agencies to come to their aid.
“I invested in the Income Protection Policy (IPP) of Standard Alliance Insurance Company Plc from November 2009. My policy number is IPP/ 10/0007796/ IKJ.
“By March 2017, I had paid N3,321,075. When my daughter, who is a beneficiary of the policy, was to undergo surgery that year, I needed N2,000,000 for that purpose and approached my then account manager in Standard Alliance, Philips Igho, who advised I should apply for a loan using my policy as collateral since the policy was almost getting to maturity.
“After several months of waiting, the company eventually granted my application and gave me a N2,000,000 loan at an interest rate of 15 per cent.
“By April 05, 2019, when the policy matured, I signed the discharge voucher from Standard Alliance indicating that I had a claim payment of N1.44 million as my termination benefit, in the presence of their staff member, Ololade Fajobi. After several months of waiting for the payment, I wrote to NAICOM for intervention on the matter.
“NAICOM did not take any action. It was not until 2021, that I got a response from NAICOM that the company would make efforts to pay.
“I eventually got a part payment of N700,000 on September 1, 2021, after mounting pressure on Standard Alliance for several months. I was told I would get my balance of N718,395.42 the following month. To date, I am yet to get my balance”, Ogbamosa, who is a practising lawyer, lamented.
Other affected policyholders shared the same tales of woes in the hands of the liquidated insurance firms and their appointed receiver managers.
Speaking on his plight, an assistant manager in Niger Insurance Plc, who was affected by the crash, lamented that he had not been paid several months of wages he served before his company went under, not to talk of his disengagement benefits.
“Before Niger Insurance was liquidated, I had worked for the company for over 21 years. Apart from being owed six months salary arrears, all my deducted savings and entitlements are currently trapped in the company.
“All efforts to get the money paid have proved abortive, despite NAICOM’s assurances to us not to exercise fear.
“I thought the basis for appointing a receiver manager was for the company to guard against the vandalisation of their assets, which they are supposed to sell off to offset its liabilities”, the affected senior staffer who begged not to be named disclosed.
Meanwhile, BH reliably gathered that apart from the defunct Niger Insurance Plc. and Standard Alliance Insurance Plc, there are other distressed insurance companies that are not paying claims to their policyholders as and when due.
“The affected firms are in serious bad shapes. Most of them have failed to hold their yearly general meetings and submit yearly financial reports to the industry’s regulator”, a source disclosed.
All efforts to get the reactions of both Messrs Sanya, Ogunkuade Esq and Kehinde Aina Esq proved abortive as calls placed to the phone numbers on their official websites were not answered.
Speaking on the development, Commissioner for Insurance, Sunday Thomas, lamented the inability of the distressed firms receiver managers to promptly offset outstanding claims due to policyholders.
According to Thomas, the affected companies statutory deposit is too small to pay off all liabilities at a go.
“So, how do we approach this? The most likely way out is that we are going to have to do it on a first-come, first-serve basis. Will this be fair to all? The largest amount in their statutory deposit is probably around N300 million for life and non-life companies, while composite companies have N500 million.
“So, how many claims can we pay with this? If, for instance, a corporate concern like Mobil applies to the deposit for an outstanding claim, what will be left to use for small policyholders that have smaller claims to collect”, the NAICOM boss asked rhetorically.
Another a source in NAICOM advised the affected workers and policyholders to exercise a little patience, assuring that plans are in top gear to clear their claims and entitlements.
According to him, many of the policyholders claims become due long after the companies became distressed.
“The queue is long and they are attending to those, whose claims were due before the underwriters ran into trouble. They should exercise patience as their time will surely come”, the NAICOM source admonished.
The insurance sector, it would be recalled, was negatively affected by COVID-19 pandemic which ravaged the industry. As a result, the financial fortunes of many companies, which was already in bad shapes, nosedived, with some of them, especially Niger Insurance, Standard Alliance and Industrial and General Insurance Plc (IGI), recording irreparable loses.
The three distressed companies were earlier dismembered by the umbrella of all insurance companies in the country, Nigeria Insurance Association (NIA), which advised stakeholders, including government agencies, private entities and individuals against dealing with them.
Some supporters of the affected companies, however, blamed their plight on the NIA, which suspended them and refused to grant them letters of membership, a requirement for securing businesses, prior to their liquidation.
“Owing to their being denied letters of membership needed to do business, the three companies were unable to participate in the Federal Government’s group life insurance policy and other businesses.
“Though I don’t want to sound like a doomsayer, I think IGI will soon go the way of Niger Insurance and Standard Alliance Insurance Plc., unless a miracle happens”, said a sympathizer.
However, the immediate past Chairman of the NIA, Ganiyu Musa, defended the association’s decision to suspend the embattled firms’ membership licenses, maintaining that the association had to instil discipline among its members.
“We have to be very harsh. We have an active committee on discipline and conflict resolution. We go beyond the usual refrain or chastisement to taking active steps to discipline erring members. We have a few of our members that have been suspended and some are about to be expelled”, Musa explained.
