Business News
Consumers Reject NAICOM’S Directive on 3rd Party Insurance, Call for Reversal
The Insurance Consumers Association of Nigeria (INSCAN) has called on the National Insurance Commission (NAICOM) to reverse its directive on the increase of third Party Motor Insurance Premium in Nigeria.
This is contained in a letter signed by its National Coordinator, Chief Yemi Soladoye, and made available to newsmen on Sunday in Ibadan.
The News Agency of Nigeria(NAN) reports that NAICOM had recently issued a policy directive on the increase of third party motor insurance premium in Nigeria by 200 per cent.
The INSCAN demanded the reversal of the directive, saying it amounted to deliberate breach of the fundamental Principle of Utmost Good Faith and other decent regulatory principles guiding Insurance practice.
“We hereby write with respect to your Circular No.: NAICOM /DPR/CIR.46/2022 dated Dec. 22, 2022, increasing the third party motor insurance premium in Nigeria by 200-400 per cent for different categories of motor vehicles.
“And by implication, giving only one week notice to the insuring public of Nigeria to comply.
“We demand the reversal of the directive as it amounts to deliberate breach of the Fundamental Principle of Utmost Good Faith and other decent regulatory principles that guide insurance practice,” it said.
The association said NAICOM failed to
understand the full implications of its directive, saying those at the receiving end were insurance consumers who provided the accrued income to the entire Insurance Industry.
It said that NAICOM’s reliance on the comparison of what was paid as premium in other parts of the world as basis for premium increment burden on Nigerians was tantamount to daylight robbery on consumers.
“Though, you threatened to sanction your Insurance Operators that fail to comply with your directive come Jan. 1, yet, the truth is that operators and NAICOM will benefit from the windfall accrued from the directive.
“The insurance consumers are, in the real sense of it, the ones being sanctioned,” it said.
The INSCAN recalled that enough time was given to the public for feedbacks and adjustments to be made on the recent cases of currency redesign as well as cash withdrawal limit introduced by the CBN.
It said the almost 20 million Motor Insurance Consumers in Nigeria deserved more than a week notice for compliance, describing the duration as a great insult to the collective intelligence of Nigerians.
The association said it had read over 500 public comments by Nigerians on the directive, saying the reputation slowly built for the Nigeria Insurance Industry was being eroded by the series of condemnations.
It said that practitioners as well as the various arms of the central government of Nigeria were being disparaged, cursed and vilified.
“How much has your commission paid out to victims and customers of Proscribed Insurance Companies over the past 20 years as required under Sec. 78 of the Insurance Act 2003 to justify astronomical increase in Premium amount?
“Where is the report of an ad hoc committee required to be set up under Sec. 52 of the Insurance Act 2003, stating the imperative of increasing Insurance Premium by a whooping 200 per cent?
“We also know that the referred Sec. 52 of that Insurance Law does not confer arbitrary powers on you because Insurance is a business affected by Public Policy and otherwise it becomes legalised robbery,” it said.
The association said that the predictable outcome of the directive would be substantial increase in the number of fake Insurance Underwriters in Nigeria.
“You are definitely aware of the fact that even at the current N5,000 MTP Premium, many Nigerians still patronise the fake underwriters.
“And this is not because these Nigerians cannot afford the N5,000 but because they don’t see any benefit be it under your genuine or the fake cover,” the association said
It said that the directive would garner more money to the pockets of NAICOM, insurance operators and more hardship to the Nigerian Insurance Consumers.
“To what extent have the interests of the Policyholders of the Insurance Underwriters, whose licences you revoked in the past one year, been protected?
“How much have you paid to the various Fire Brigades in Nigeria as Fire Service Maintenance Fund as prescribed under Sec. 65 of the Insurance Act 2003?
“But still, you are quick to increase the Premium burden on the largely dissatisfied Insurance Customers in Nigeria,” it said.
The INSCAN lamented the increment without due consideration for the feelings of the consumers, particularly in Nigeria, where the good customers who didn’t make claims are never rewarded.
The association said that failure to reverse the obnoxious directive would put NAICOM on record as the regulator with the highest level of impunity and insensitivity in Nigeria
It stated that NAICOM’s policy directive was not subjected to civilised trade practices, professionally-accepted insurance principles, transparent customer- oriented regulations and humane attention to the economic situation of most Nigerians.
The association said that consumers
were further convinced that the motive behind the directive was self-serving, arrogant and detrimental to their interest.
It said NAICOM was established to protect consumers, demanding reversal of the policy pending proper consideration of the grey areas of the directive.
NAN reports that INSCAN, an affiliate of the Federal Competition and Consumers Protection Commission of Nigeria (FCCPC), was established in 2010.
It was established to speak for the aggrieved Nigerians on insurance matters and promote the adoption of insurance mechanism in Nigeria, among others. (NAN)
By Tony Obiechina, Abuja
The African Export-Import Bank (Afreximbank) has announced the successful completion of a first-of-its-kind India-focussed club deal for US$282.00 million.
Initiated for the exclusive participation of Indian lenders, and arranged by Bank of Africa UK PLC, the primary syndicated club deal saw participation from Indian lenders through their overseas branches and subsidiaries in the Dubai International Financial Centre in the United Arab Emirates, Singapore and Mauritius.
The facility, which was backed by six participating banks and financial institutions, including five that joined as first-time lenders to Afreximbank, helping the Bank achieve its objective of diversifying its funding sources, carries a three-year tenor.
At a commemorative event held in Dubai, U.A.E., to mark the conclusion of the deal, Haytham ElMaayergi, Executive Vice President at Afreximbank, said that the conclusion of the initiative represented a major milestone for the Bank as it sought to fulfil the key objectives of its funding programme.
Highlighting the importance of investing in, and for, Africa, Mr. ElMaayergi said: “this facility will help Afreximbank to continue to play a major role in the development of intra-African trade and trade between Africa and the rest of the world, particularly with India.
It is a testament to the rapid growth in Africa’s economic relationship with India and is evidence of Afreximbank’s growing ability to harness resources into Africa and to fund trade finance related investments that would have a positive impact on trade between Africa and India.”
Chandi Mwenebungu, Director and Group Treasurer of Afreximbank, reviewing the Bank’s vision for Africa, said that its funding objectives included achieving the diversification of its liability book by geography, investor type and tenor.
Also addressing guests at the event were Said Adren, CEO of Bank of Africa UK PLC, who thanked the lenders for their participation, and Zineb Tamtaoui, General Manager of Bank of Africa, Dubai Branch, who expressed appreciation for the opportunity to put together “a landmark deal that would be a stepping stone to many India-focused club deals going forward.”
By Tony Obiechina, Abuja
Geregu Power Plc has generated N50.4bn on electricity sales and capacity charges to Nigerians in the first quarter of 2024.
The power company which is the first listed power company of the Nigerian Exchange Ltd disclosed the performance in its Q1, 2024 financial statement.
The company grew its Q1 revenue by 225 per cent from N14.
2bn in 2023 to N50. 4bn in 2023.A breakdown reveals that Geregu Power sold energy worth N31bn and received N19bn as revenue from capacity charge.
Recall that the power company posted an annual revenue of N82.9bn in the full year of 2023 but it has covered half of the amount in Q1.
The revenue was above the company’s forecast for Q1 2024 when it projected its revenue to rise to N31.24bn.
Geregu Power recorded a profit before tax of N21.9bn up from the N5.3bn recorded in Q1 of last year, reflecting 307.8 per cent growth.
During the period underreview, the company saw its profit after tax rose by 307.3 per cent to N14.46bn from N3.54bn recorded in Q1 of last year. In the full year 2023, the company made N16.1bn net profit.
The net profit was above the company projection of N5.5bn.
Geregu Power took an income tax charge of N7.43bn, up from the N1.8bn in Q1 2023. The tax charges were higher than the N2.7bn projected for Q1 2024.
The company also spent N21.5bn on the cost of sales involving gas supply and transportation, up from the N6.6bn spent on gas supply and transportation in Q1 2023.
By Ademola Oyetunji
In a surprising turn of events on Wednesday, the Central Bank of Nigeria (CBN) dissolved the boards of three prominent commercial banks – Keystone, Polaris, and Union Bank. This move, although unanticipated, transpired despite the Central Bank’s recent endorsement of these banks’ financial soundness.
Governor Olayemi Cardoso, at his inaugural address during the Chartered Institute of Bankers of Nigeria (CIBN) annual dinner last year, had lauded Nigeria’s financial sector’s resilience in 2023.
Stress tests conducted on the banking industry indicated its strength under various economic scenarios. However, Cardoso highlighted the need for banks to reassess their responsible banking framework, a sentiment echoed by President Tinubu.President Tinubu’s evident discontent with the Godwin Emefiele-led CBN triggered a comprehensive review of the financial system. A special investigator, Jim Obazee, was appointed to conduct a forensic investigation into Emefiele’s tenure, with damning revelations emerging. Recent developments suggest the initiation of a full-blown financial system reform.
The CBN’s dissolution announcement and the subsequent appointment of new executives for the affected banks, including Yetunde Oni, Mannir U. Ringim, Hassan Imam, Chioma A. Mang, Lawal M. Omokayode, and Chris Onyeka Ofikulu, might mark the beginning of implementing the investigation’s recommendations – a significant cleanup of the financial sector.
Allegations surfaced during the investigation, suggesting non-cooperation from some bank executives and Emefiele’s questionable acquisitions through proxies and cronies. Cardoso may have secured presidential approval for the CBN’s decisive action.
The CBN cited various infractions by the banks, including regulatory non-compliance, corporate governance failures, and activities threatening financial stability. Despite the challenges, the CBN assured the public of depositors’ fund safety and its commitment to upholding a safe, sound, and robust financial system.
The Special Investigator’s report revealed documents pointing to Emefiele’s involvement in Titan Trust Bank and Union Banks’ acquisitions with ill-gotten wealth. The CBN’s swift replacement of the ousted chief executives received widespread commendation, especially from high-net-worth stakeholders aiming to avert a crisis of confidence within the affected banks.
Adewale Aderounmu, an industrialist, applauded the CBN for implementing effective policies under Olayemi Cardoso’s leadership, despite detractors’ actions against the Naira. Ayomide Deepak, an Abuja-based stockbroker, welcomed the action but emphasized the need for caution in handling revelations from the investigation to prevent further economic challenges.
As the CBN wields its regulatory hammer on these banks, the hope is that other bank executives and investors will learn valuable lessons for the sake of the economy. The CBN’s action is perceived as a strategic move aimed at revitalizing the economy and financial system, not a mere vendetta.
*Ademola Oyetunji writes from Ibadan.
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