Lagos – The Progressive Shareholders Association of Nigeria on Thursday told the National Insurance Commission (NAICOM) to roll out policies that would increase insurance penetration.
The President of the association, Mr Boniface Okezie, made the call in a statement in Lagos, saying that the commission should avoid over-regulation to increase insurance penetration.
Okezie said that insurance penetration currently at 0.4 per cent of the nation’s Gross Domestic Product was deplorable.
He urged the commission to pursue effective enforcement policies that would stop rate-cutting and ensure prompt payment of claims.
“We believe in policies to stop rate-cutting, policies to allow various payment frequencies such as monthly premium payment, stricter enforcement of the law, no premium and no cover for brokers,” he said.
Okezie said that NAICOM should stop levying long-term businesses and look for other ways of generating income.
He said that long-term businesses were not for shareholders but belong to policy holders, adding that what was shared with shareholders was profit on investment income.
“NAICOM can also develop more tax benefits of life insurance products to customers so that it can grow as a method to preserve wealth,” Okezie said.
He said that the commission, under its new leadership, should change the face of insurance in the country and curb unhealthy practices in the industry.
“It is our firm believe that as a regulatory body, it is high time some insurance companies engaged in unethical practices of rate-cutting due to the cut-throat competition in the industry.”
He said that insurance companies “strive to gain undue advantage over other competitors thereby making them unable to arrest their obligations when the need to pay claims arises”.
He said that NAICOM should regulate pricing activities in the industry to curb excessive price cutting and check operative excesses.
Okezie also queried the rationale for limiting an insurer’s borrowing to just five per cent of shareholders’ funds. (NAN)
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