Leo Aligwo Asst. Business Editor — ONE perennial societal problem that seems to have defied solutions in Nigeria is the issue of fake insurance certificates. It has indeed become a worrisome issue as some unsuspecting Nigerians are duped by some fake insurance practitioners who collect huge sums of money from them in exchange for false insurance documents.
Investigations by Champion Insurance revealed that just as Aba the commercial nerve centre of Abia State and Lagos, Nigeria's premier commercial heart beat are associated with fake drugs and visa referred to as Oluwole respectively, Ibadan, the Oyo State capital is associated with fake marine insurance certificates and other related documents.
These quacks effectively compete for customers with the genuinely registered insurance agents, brokers and insurance companies.
Untill recently, neither the National Insurance Commission (NAICOM) nor professional bodies such as the Chartered Insurance Institute of Nigeria (CIIN), Nigeria Insurers Association (NIA) and the Nigerian Council of Registered Insurance Brokers (NCRIB) have been able to boost of any arrest of fake insurance agents or closure of their operational base. They are being treated with kid gloves under the excuse that it is difficult for the law enforcement agents to identify fake operators in the insurance industry or distinguish between genuine and fake insurance certificates
It was not a strange development when the NAICOM boss, Mr. Fola Daniel at a recent workshop designed to educate the insurance brokers and agents on the Market Development Restructuring Initiatives (MDRI) lamented that the insurance agency system had become an all comers affairs as it has been hijacked by retired army majors and school dropped outs.
Mr. Daniel however assured participants at the one-day brain-storming workshop held in Lagos that the MDRI would address the nunseting issue of fake insurance brokers and agents in the industry and eventually wipe out the institutions which breed them.
It is crystal clear that the targeted increase in the industry's gross premium income from N164 billion to N1.10 trillion by the year 2020 will not be possible unless touting and fake insurance institutions are wiped out of the system.
Speaking on the topic: "The MDRI, wiping out of fake insurance institutions, shift of focus from the effect to the cause," NAICOM consultant, Mr. Sola Doye said the bulk of the fake insurance products arose from difficulty in detection, ignorance, convenience, lack of consumer trust and un-economical underwriting.
On the issue of difficult of detection, Mr. Doye said NAICOM would collaborate with the federal and states law enforcement agencies to carry out, on annual basis, a verification exercise on all the factories, companies and professionals captured by the various compulsory insurance provision in Nigeria.
According to him, the exercise would take place between September and December of each year being the period when road accidents, construction works, bush burning among others are on the increase.
It would require the officers to visit each applicable risk in Nigeria and ensure that the appropriate insurance compensation programme had been put in place.
Commenting on the issue of ignorance, he explained that an industry wide enlightment campaign has been put in place to check the problem, pointing out that the success of the fake insurance institutions in Nigeria is largely due to ignorance on the part of the consumers and convenience of obtaining the cover at the same time of renewing the vehicle license.
For instance, the NIA and NCRIB governing councils had at a meeting held on January 29, 2009 and February 2, 2009 respectively, agreed in principle to raise N100 million annually for three years for industry wide insurance education and enlightenment between 210 and 2012, to be managed by Insurance Industry Compass Committee (IICC).
The funds is to be specifically deployed to the listed purposes: 10 million hand bills for the 774 local governments, radio programme - word of risks, television programme - "claim direct," insurance as part of the National Youth Service corps (NYSC) Community service, establishment of schools debate on insurance among primary schools in Nigeria and as compulsory subject in secondary schools and insurance as General studies in the tertiary institutions.
On convenience, the consultant, explained the need for use of insurance sales team, stressing that verification would become part of the field work of the sales team and where a certificate is presented as evidence of insurance, it is incumbent on the field officer to trace same to the company of issue and later confirm the authenticity of the cover to the insured.
It is imperative that the network administrators, the brokers and underwriter's marketing staff to join the annual inspection teams.
The new rules and regulation under the MDRI stipulates that details of all certificate inspected during the annual inspection and the carrier should be taken by the CIMCIN member on the team and be traced to the company of issuance after the inspection with publication of the fake ones in the newspapers by NAICOM after the exercise. In other words, people would be requested to present the original certificates during the annual inspection.
The MDRI was equally designed to check the recycling of old certificates on motor vehicle insurance. Again, NAICOM consultant pointed out that it is most likely that people who recycle old certificates on motor insurance would not be able to show the original document on the spot, explaining that 50 per cent of the commission due to business generated during the annual inspection should go to the law enforcement fund of the industry.
Aside the ongoing installation of Information Technology (IT) system expected to be completed early 2010, NAICOM is also deploying the use of Radio Frequency Identification Device (RFID) to fish out fake insurance documents.
ere is no doubt that technology has come to show the way we should do business. Although the insurance industry investment in technology is relatively new, experts say would tremendously assist in the identification of fake insurance at all times especially now that road block by the police has been declared illegal. This is much better compared to the cumbersome physical method which could only work during annual verification exercise. Precisely, the RFID is one of the ingenious ways of detecting fake or expired motor vehicle certificates even when the vehicle is on motion; Mr. Doye explained.
He however, said that the success of the scheme would depend on the cooperation and enlightenment of the law enforcement agents, hinting that about three organizations which are ready to install the technology have been introduced to the NIA.
It is understood that the Nigeria police is ready to embrace the technology as it had at a parley with NAICOM on January 22, 2009 indicated its willingness to pursue the project to a successful conclusion.
The establishment of insurance protection organization has been identified as another means of combating the cankerworm - fake insurance in Nigeria. The insurance industry experts admitted that the presence of an independent redress mechanism goes a long way in promoting the confidence and trust of policyholders in the insurance mechanism. It was in a bid to realise the above dream that the Insurance Consumers Association of Nigeria (INCAN) born in February 2009 with the sole objective of serving as a medium for public enlightenment, consumer education and information dissemination on insurance issues.
Others are provision of avenues for conflict resolution, contract enforcement and good customer service in insurance business in Nigeria.
In addition, it is expected to assist in bringing to life an insurance industry that would become health and safety advocates for a more secure society.
The NAICOM consultant further emphasized that the INCAN is now fully operational and ready to contribute its quota to the development of insurance in Nigeria, disclosing that the apex insurance regulatory body had met twice with the association.
Hear him: "Their programme are laudable, their views are balanced and far reaching, and can serve as formidable bridge builders across different interest groups both at local and international levels."
He assured that NAICOM would hold further discussions with the association to identify areas of mutual support and cooperation.
Continuing, Mr.Doye said the association would serve as a vehicle for opening of the insurance industry to the insuring public, how to achieve a cheaper redness mechanism, creation of a permanent forum for insurance education and securing a grass-root feed back mechanism.
Also listed are formidable consumer protection organization, creation of global consumer trust and transparency at local and international levels as well as serve as a voice and face of the industry where it becomes expedient.