Omosehin Resumes as NAICOM Boss, Says Insurance Sector Critical for $1tn Economy

James Emejo in Abuja

The newly-appointed Commissioner for Insurance/Chief Executive, National Insurance Commission (NAICOM), Mr. Olusegun Omosehin, yesterday, resumed office, promising to reposition the insurance sector, which he deemed as critical to achieving President Bola Tinubu’s aspiration for $1 trillion economy by 2026.
Speaking at the handing over ceremony at the commission’s headquarters, Abuja, he made a passionate appeal to staff to embrace a new chapter with optimism as the new administration worked to enhance processes, leverage technology and foster a culture of excellence.

He hinted at an internal process overhauling to make it  more efficient to the public and engage more constructively with all its external stakeholders.
The new NAICOM boss also promised to exercise utmost probity in ensuring a safe, sound and stable insurance sector while protecting policy holders, public interest as well as improving trust and confidence in the Nigerian insurance sector.

He said the organisation plays a critical role in shaping the Nigerian insurance industry to protect the interest of policy holders.
Omosehin stressed that insurance was not only a business but a social safety net, adding that it was the responsibility of the commission to ensure a strong, reliable and accessible safety net for all Nigerians.

He further stated that the landscape of the Nigerian insurance industry remained at a pivotal juncture where it is faced with significant opportunity for growth and challenges that require innovative and decisive regulatory responses.

He promised to operate a transparent, inclusive and integrity-based regime where everyone would be allowed to present practicable ideas and suggestions to improve and make NAICOM a beacon of excellence in insurance regulation and a source of pride to the nation.

He said, “When you look at the ambition, desire and agenda of the new administration with regards to the Renewed Hope Agenda. I am sure many of us are aware that Mr. President has indicated and declared $1 trillion economy by 2026.

“And a significant aspect of this is supposed to come from the insurance sector. We are an integral part of financial services sector that must make that happen.

“So, that puts on us a very heavy burden to deliver that which insurance is expected to contribute.”

He thanked his predecessors, particularly the erstwhile Commissioner for Insurance, Mr. Sunday Thomas, for their contributions in getting the commission to its present level.

Thomas, however, expressed his gratitude to God for a successful career, and commended the staff for their immense support amid challenges.

He said under his watch, the commission was able to create a conducive environment both for the industry and regulatory system as well as enhance the automation of the institution.

He said the commission was also able to create partnerships as well as grow the industry’s assets to over N2.32 trillion among other accomplishments.

However, Omosehin’s assurances came on a day the Transparent Protection Limited/GTE, a Non-governmental Organisation (NGO), drew attention to the challenges of insurance regulation and supervision in the country, warning of an impending collapse of the sector if urgent remedial steps are not taken by the stakeholders.

The company’s Lead Director, Dr. Sam Chukwuka Onyeka, at a media briefing in Abuja, alleged that January 2024, regulatory and supervisory activities at the NAICOM, had been running at a rather unusually slow pace.

He claimed that no serious regulatory and supervisory activities are ongoing in the industry partly due to the funding challenges confronting the regulator, following the federal government’s implementation of 50 per cent compulsory deduction from the revenues of some federal government revenue generating agencies including the commission.

Onyeka said, “NAICOM was erroneously considered as being among the revenue generating agencies.

“However, NAICOM is purely a regulatory agency which derives its funding from statutory levy paid by insurance institutions in Nigeria.

“The NAICOM’s approved budget for 2024 is N10 billion. Of this, the federal government takes 50 per cent which is N5 billion. Meanwhile, the current annual wage bill of NAICOM staff is N5 billion.”

He said, “This simply means that NAICOM is only able to pay salary and will be having no operations funds. Worse still, effective May 1, 2024, the federal government announced 25 per cent increase in salary for civil servants.

“This means that NAICOM’s wage bill will rise by 25 per cent. The implication of the foregoing is that NAICOM will be unable to continue to deliver on its mandate which is effective regulation and supervision of the insurance industry.”

He said the situation, “portends serious danger to the survival of the insurance industry in Nigeria.

“Without effective regulation, the industry in Nigeria will soon collapse. Even with close monitoring of the activities of the insurance institutions, as it used to be, it was difficult to guarantee 50 per cent efficiency in market discipline.

“It follows logically, therefore, that in the absence of effective regulation, as is currently the case, it must be taken for-granted that in less than no time, the insurance industry in Nigeria will finally collapse.”

Nonetheless, proffering  recommendations to save the insurance industry from the brinks, Onyeka said the most critical challenge remained funding gaps.

In the immediate term, he urged the federal government to remove NAICOM from the application of the 50 per cent statutory revenue deduction while the commission also considers urgent reforms including staff rationalisation, relocating its supervisory operations to Lagos where the operators are concentrated, and building a strong IT capacity.

In the long run, he said the federal government may think of increasing the percentage of the insurance supervisory levy, adding however, that apart from requiring amendment of the existing law, this may amount to indirect taxation on policyholders which may further drive the masses into poverty.

He said, “This is the time to save the insurance industry in Nigeria from imminent collapse. All hands must be on deck.”