The federal government has been urged by the insurance industry’s stakeholders to reevaluate its order to the National Insurance Commission (NAICOM) to transfer half of its internally generated revenue (IGR) to the federation account.
Recall that in an attempt to boost income and close revenue collection leaks, the government implemented a regulation requiring a 50% reduction from the IGR of all government-owned businesses.
Speaking on the development, Babatunde Oguntade, President of the Council of the Nigerian Council of Registered Insurance Brokers (NCRIB), stated that the insurance supervisory fund tax that insurance institutions pay is intended for market growth and regulatory supervision.
Oguntade stated: “Placing the insurance supervisory fund levy within the single treasury account system would impede the country’s much-needed insurance growth and hold back the commission’s financial solvency position.”
The president of NCRIB pointed out that the insurance sector, which ought to be the cornerstone of the Nigerian government’s attempts to revive the country’s economy, was currently insecure.
Additionally, he urged lawmakers to move quickly to adopt the 2022 Consolidated Insurance Bill, which, if it becomes law, would address many shortcomings in the current Insurance Act of 2003 and the 1997 NAICOM Act, allowing for the industry’s sustained expansion.
Oguntade voiced worries that government agencies were not doing enough to make sure the government’s material and human resources were properly insured.
He urged lawmakers to turn the trend by supporting Ministries, Departments, and Agencies in carrying out insurance budgets in a way that promotes insurance’s overall growth and accelerates its contribution to the GDP of the country.
Speaking as well, Dr. Sam Chukwuka Onyeka, Lead Director of Transparency Protection Limited and an insurance professional, cautioned that the government’s refusal to reevaluate the commission as a source of income will have a significant impact on the expansion of the insurance industry.
Onyeka suggested that the government take into consideration removing NAICOM from the list, cautioning that doing so might significantly impair the Commission’s financial standing and make it more difficult to regulate and oversee the insurance sector.
Raising the statutory supervisory levy amount may be the only option to prevent this. However, this will undoubtedly backfire since the insurers will automatically tack on the difference to the prices they charge for insurance goods, making them unaffordable for Nigerians, according to Onyeka.
