Lagos — The National Insurance Commission (NAICOM) has called for a review of the insurance laws in Nigeria if the industry must develop and contribute meaningfully to the GDP.
The Commissioner for Insurance, Mr. Fola Daniel, said this at a two-day sensitisation retreat for members of the House of Representatives' Committee on Finance held in Karu, Nasarawa State.
According to the commissioner, the realisation of the various initiatives and reforms being embarked upon by the commission is constrained by poor legal framework, poor public perception of the sector and low awareness amongst the populace among others.
He said: "To address the constraint occasioned by poor legal framework, in March 2009, the Honourable Minister of State for Finance inaugurated a committee to review all laws and regulations relevant to insurance in Nigeria under the chairmanship of Professor Joe Irukwu. The committee had since submitted its report and a new insurance draft bill is presently being reviewed by the Federal Ministry of Finance. The draft bill is expected to be passed to the Federal Executive Council soon for onward presentation to the National Assembly."
He noted that the review of existing insurance laws in the country became imperative specifically by the "need, amongst others, for a robust legal and regulatory framework that will ensure that the insurance sector contributes positively to the principal objective of the Financial System Strategy 2020 (FSS 2020) to make Nigeria Africa's financial hub and one of the 20 largest economies in the world by the year 2020; the need to evolve effective risk based supervision, in the regulatory system as the existing rule based supervision enabled by the current laws has become obsolete and therefore cannot drive the envisioned development of the sector; the need to ensure ethical practice and international best practices as required by the International Association of Insurance Supervisors (IAIS), and the need for a legal and regulatory framework that allows the supervisory authority to deal promptly with issues evolving from the dynamism of the insurance business."
The commissioner also informed the members that "the bill consolidates and harmonizes the various existing legislations for effective and efficient regulation, supervision and sound insurance practice in Nigeria. The existing legal framework often creates uncertainty in underwriting processes, regulatory inconsistencies, conflict of laws, etc."
In his remarks, the Chairman, House of Representatives Committee on Finance, Hon. Abdulmumin Jibrin, thanked the commission for organizing the retreat, saying that the sensitization retreat has afforded them the opportunity to be exposed to the workings of the commission.