Senate moves to provide legal framework for insurance businesses

The Senate has passed for 2nd reading a bill that seeks to produce a comprehensive upright framework for the legislation and supervision of all map of insurance companies in Nigeria.

The Nigeria Insurance coverage Industry Reform Bill, 2024 sponsored by the chairman, Senate Committee on Banking, Insurance coverage and diversified Financial Institutions, Senator Adetokunbo Abiru (APC Lagos East), and 41 diversified Senators at some level of plenary.

Abiru, whereas leading debate on the usual principles of the bill on Thursday decried the low penetration of insurance companies and products in Nigeria, no matter being one amongst the oldest industries in the nation’s financial companies and products sector.

He attach the nation’s penetration rate at 0.5%, rating 70th globally and fifth in Africa.

“With its young and vivid inhabitants and rising GDP, the replacement of exponential hiss is undeniable. However, to really thrive in the following decade, the enterprise must reform in expose to advantage from the alternatives and make a contribution to economic hiss in the nation,” he stressed.

In reference to the extant legal pointers that adjust the practices of various insurance companies, love the Insurance coverage Act, 2003, the Marine Insurance coverage Act, Motor Vehicles (Third Occasion Insurance coverage) Act, Nationwide Insurance coverage Corporation of Nigeria Act, and Nigeria Reinsurance Corporation Act, these legal pointers, in line with Senator Abiru, personal change into ancient and ineffective in the wake of improvements and dynamics which personal characterised the practices of insurance in most smartly-liked time.

He mentioned: “All these legislations, having surpassed a two-decade designate, lack provisions that could well adequately address as much as the moment challenges and attend hiss & improvements inner the enterprise. This upright obsolescence has ended in a pair stage of regulatory inefficiencies in the insurance enterprise.

“This has also hampered the enterprise’s capacity to successfully compete on a global stage, underscoring the necessity of an intensive evaluation and update to crimson meat up international competitiveness of Nigeria’s insurance enterprise.”

Whereas highlighting the disclose aims of the bill and the usual advantages to Nigerians, and the economy, he mentioned the bill consolidates various present objects of legislation regulating the behavior of insurance companies in Nigeria such because the Insurance coverage Act, 2003 the Marine Insurance coverage Act, Motor Vehicles (Third Occasion Insurance coverage) Act, Nationwide Insurance coverage Corporation of Nigeria Act, and Nigeria Reinsurance Corporation Act.

“The bill therefore seeks to produce a sturdy upright and regulatory framework that can be certain the Insurance coverage sector contributes positively to the main aim of the Financial Machine Strategy to construct Nigeria Africa’s financial hub and one (1) of the twenty (20) very finest economies in the sphere; evolve effective risk essentially based supervision, in the regulatory machine because the present rule essentially based supervision, enabled by the most smartly-liked legal pointers has change into ancient; posthaste observe the technique of managing outmoded companies because the present legislation is now now not atmosphere friendly for effective damage administration; review the penalties because the ones prescribed in the present legal pointers are insufficient and now now not deterrent enough.

“Varied aims are: The necessity to construct sure moral observe and international handiest practices as required by the International Affiliation of Insurance coverage Supervisors (IAIS), and the necessity for a upright and regulatory framework that enables the supervisory authority to deal promptly with points evolving from the dynamism of the insurance enterprise,” he published.