Business & Economy - News - December 9, 2021

NAICOM harps on benefits of Islamic insurance; unveils new face of insurance in Kano

By Bassey Udo

The Kano State government has approved the domestication of the laws on compulsory insurances in the State, the Commissioner for Insurance/chief executive of the National Insurance Commission, Olorundare Thomas, has confirmed.

Speaking on Wednesday at the sensitization programme for top government functionaries in Kano on the implementation and enforcement of compulsory insurances in the state, the Commissioner said the state government has already approved the setting up of a joint committee on the implementation of the compulsory insurances in the state.

The Commissioner who said the sensitization programme by the Commission was to boost insurance penetration in Kano and the entire northern region, noted the benefits new face of insurance in the State.

Although the Insurance Act 2003 and other relevant Laws make certain categories of insurance mandatory, the NAICOM boss lamented that sentiments of religion and tradition have posed serious challenges in their implementation and enforcement.

Among the insurance policies that are compulsory under the law include third-party motor insurance for all mechanically propelled vehicles on public roads; insurance on all buildings under construction that are more than two floors, and all public buildings, including schools, offices, hotels, hospitals, and shopping malls.

Others are professional indemnity for all medical practitioners and hospitals; group life insurance cover by employers for employees where there are more than three persons, and annuity for retirees as provided for under the Pension Reform Act 2014.

He said the introduction of ‘Takaful Insurance’ (otherwise known as Islamic Insurance) by the Commission was to create the opportunity for the northern part of the country to embrace insurance as an alternative to the conventional insurance, to cater for sentiments of religion and tradition.

The approval for the domestication of the laws on compulsory insurances in the state, the Commissioner said, would not only help the development of insurance culture in the state, but also in the entire northern part of the country.

Since the sensitisation programme in the state last October, he said NAICOM has been monitoring micro, small and medium enterprises (MSMEs) in the state, and the level of interest generated has shown the state as a potential insurance hub in the country.

He commended the State government for including the implementation of motor vehicle 3rd party insurance and other compulsory insurances in the terms of reference of the joint committee.

The decision, he noted, would change the narratives above Kano State on insurance, moving the state from 11th position in the Gross Premium ranking to among the first three States in the federation.

“Kano State is a commercial centre with huge population and business potential. The adoption and enforcement of the compulsory insurances will no doubt have a multiplier effect on insurance premium, employment opportunities, the standard of living of the people and the internally generated revenue of the state,” the NAICOM boss said.

He urged the committee to work-out a fashionable mechanism that would ensure Kano State became a role model to other states in the country in the area of insurance penetration.

The other area he wants the Committee to look into include the recurring fire inferno in different markets across the state which have been causing so much economic havoc on traders and the government.

One of the cardinal objectives of insurance, he said, was the protection of insurance service consumers against such disasters, by creating the needed awareness that would forestall occurrence.

Where the unexpected happens, he said insurance would ensure compensation would be paid to victims to minimize its impact.
“Having the markets and goods insured is going to ensure stability and comfort for our people and also save the government some cost that ordinarily would have gone in compensating traders,” he said.

The NAICOM CEO identified Kano state as a critical in the drive to increase penetration and growth of the insurance sector in country by virtue of its large population.

The partnership between the State government and NAICOM, he pointed out, was a good to assist the people when they needed it most, and also for the financial services sector to boost financial inclusion, one of the cardinal policies by the federal government for a sustainable economic development and lifting families out of abject poverty.

On the benefits to the government and people of the state, the Commissioner said insurance would create opportunity for the creation of additional source of internally generated revenue (IGR), and reduction in government exposure in event of disasters that may affect the citizens, by shifting the burden to the risk-bearers (insurance companies).

Other benefits include financial compensation to citizens who may lose their properties, or become disabled in event of occurrence of insured accidents/disasters etc; provision of assistance on fire-fighting equipment for the State Fire Service; job/employment opportunities for citizens of the state; free risk management education and enlightenment programmes for the citizens of the state.

He used the occasion to assure the State government and the people that with introduction of Islamic insurance (Takaful) and Microinsurance for small businesses, the state as a commercial nerve, would not be let down by the insurance industry.

“Insurance is something you buy when you seem not to need it, because it will be too late to buy when the unforeseen occurs, and you may regret not buying it. It is also imperative for the government to always factor insurance whenever it is considering disbursement of funds, either to farmers or traders in its poverty alleviation programmes etc. to guarantee business sustainability and revolving of funds for the future. This will provide a safety net for the NMSMEs against unforeseen circumstances, while securing millions of jobs and wealth creation,” he said.

He underlined the need for the joint committee to consider the issue of collapsed buildings that have continued to be one of the problems in big and major cities in the country.

The agencies in charge of approval and monitoring construction, he said, should be given the mandate to look into the problem and collaborate with other agencies, like the Town Planning Authority, Fire Service, Police, etc. and relevant professional associations, like COREN, some of which should also be co-opted into the Committee.

“This will ensure that provisions of the law regarding the insurance of public buildings against 3rd party liability and all buildings under construction that are above two floors are strictly adhered to,” he said.

Leave a Reply

Your email address will not be published. Required fields are marked *

Check Also

Private finance model can help Nigeria realise its electricity generation target, says NBET

By Bassey Udo The adoption of the standard private finance template in the execution of po…