Following the increasing cases of building collapse across the country some insurance stakeholders have decried the poor showings of insurance companies citing the delay to enforce compulsory building insurances by the regulator as one of the reasons for the operators’ poor performances.
Shareholders of some insurance companies attributed the non dividend payout and dearth of bonuses by companies to the alleged weak regulatory system of the insurance regulators.
“As you can see, many buildings are collapsing all over Nigeria because of the rains and flood and many others have been flooded. The failure to enforce these laws made it impossible for companies to make enough income and to pay shareholders adequate returns in form of dividend on our shareholdings”, Mr. Dele Adebayo, a shareholder said.
Speaking at various annual general meeting held so far in the industry in 2011, the shareholders have lamented that contrary to their expectation from their investments in insurance companies, the industry remains the shadow of its promises, most especially, the promised dividends and other bonuses during the 2005 recapitalisation and consolidation exercises.
They blamed the commission for the failure to enforce relevant insurance laws in the country in spite of the fact that the federal government has empowered it to do so.
“The regulatory body has failed to implement the laws on compulsory insurance, particularly the one on compulsory insurance of public buildings and buildings under construction.
Speaking in the same vein, the Chairman of Fire Offices Committee of the Nigerian Insurers Association (NIA), Mr. Olugbenga Falade said one of the major challenges facing the insurance industry was the non-enforcement of the compulsory insurance cover by regulatory authority in the nation’s insurance industry.
However, contrary to the shareholders’ view about the commission, the Commissioner for Insurance, Mr Fola Daniel, has repeatedly emphasised that the commission needed not wield a big stick before it could carry out perfect and effective regulatorion, stressing that the commission had silently effected discipline that compelled companies to do business ethically.
Throwing more light on the nature of criminal breaches of the law in the industry, the commissioner said: “We have, however, witnessed some measure of impunity by our colleagues who see some of our gentle actions as signs of weakness. Besides the effect on the regulators, market indiscipline is now threatening the stability of most companies and the prosperous future that our environment has provided.
“We have seen insurers destroy financial bases. Unbridled, unsustainable and technically unsound rates are being offered for risks by the underwriters more out of the need to market than to insure,” he said.
With regard to insurance broking, he said some insurance brokers “operate without proper documentation and in some cases mislead the public by presenting different sets of documents for different purposes.