The Centre for Pension Rights Advocacy has charged the National Insurance Commission (NAICOM) to make it mandatory for insurance companies in the country to fully disclose their financial transactions during each financial year to guarantee transparency in their operations and the entities viability on a sustainable basis.
The Centre’s Executive Director, Barrister Ivor Takor, gave this charge during the just ended 3rd National Conference of the National Association of Insurance and Pension Correspondents (NAIPCO) in Lagos.
According to him, the industry regulatory institution must not only be concerned about what the companies are doing rather than how much capital they hold, adding that growing the industry requires that the regulator must enforce full disclosure to stakeholders.
Takor explained that it would be difficult to protect the interest of shareholders of the risk underwriting entities and the integrity of the industry if NAICOM did not make full disclosure a prerequisite for the companies.
He, therefore, advocated a regulatory regime that would make sure that investors get the right type of information or understand fully what their companies are doing with their funds in order to make the industry attract more investments.
The pension rights advocate noted that currently, some policyholders were still uncertain about whether their insurers would pay claims when the need arises, thereby encouraging what some of the insured refer to as hidden clauses in insurance policies.
Takor said: “Policyholders and maybe shareholders need to have sensible risk returns profiles otherwise the industry will not be viable in the long run.
“The Federal Government has pegged the capital base of mega insurance firms at N15 billion. The regulator knows the industry better and has reasons for whatever decisions it takes, which I believe are for the growth and development of the industry.
“The regulator to me should be more interested in what companies are doing rather than how much capital they hold. To develop the industry, shareholders, policyholders and the regulator must understand what companies are doing”, he added.
To grow the risk underwriting entities, the pension rights advocate advised the operators to from time to time re-invest in the companies rather than waiting for regulatory recapitalization process, which in most cases comes with sanctions for non-compliance.
While acknowledging the recent marketing initiatives of the insurance companies as desirable for the industry, Takor however cautioned against insensitivity of insurers to cost of premium and the insured’s claims whenever they arise as this will be counter-productive in the long run.
He cautioned: “If insurance companies have two faces, that is the face of a dove when marketing and the face of a lion when claims are due for payment, people will keep away from insurance companies and resort to insuring all their insurable risks with God through prayers.” he added.