UBA group chairman Tony Elumelu has proposed N50 million as capital base for insurance broking firms operating in Nigeria.
Mr Elumelu said on Thursday at the 60th anniversary colloquium of the Nigerian Council of Registered Insurance Brokers (NCRIB) that it had become necessary to recapitalise the insurance brokerage industry in the country as N5 million was not enough capital base.
The colloquium was themed: “60 Years of Insurance Broking: Redefining the Practice and Practitioners.”
“I recommend a minimum of N50 million as capital base; we need to adequately capitalise the brokerage sector,” Elumelu said.
“The insurance is very important to the economy, so also is the quality of governance, institutions, and practitioners of the sector.
“Insurance is recognised as a technical business that requires special expertise.
“This, therefore, makes it difficult for most people to make the right choice on insurance purchase and also requires professional assistance when claims occur.”
According to him, members of NCRIB have over the years facilitated insurance businesses in hundreds of billions of naira, delighted millions of Nigerians with their professional insurance services and ensured that claims are duly settled.
Elumelu noted that expertise of an insurance broker was crucial, as intermediaries between the insurance consumer and an insurance company.
He charged NCRIB’s leadership to enforce strict adherence to corporate governance by all its members and weed out non-registered and non-compliant members from its fold to maintain its integrity.
He emphasised that in redefining the practice and practitioners in the insurance broking profession, NCRIB should lead the war against unethical practices that had been the bane of the industry for years.
The chairman of Heirs Holdings listed some of the unethical practices to include premium rate cutting, delayed premium remittance, unremitted premium, overloading of premium, returned premium, fake documents and fraudulent claims.
Elumelu also mentioned collusion to defraud, mis-selling, unhealthy competition, misrepresentations, manipulation of policy conditions, self-enrichment methods disguised as marketing expenses, among others.
According to him, while the National Insurance Commission (NAICOM) continues to play its role as the industry regulator, NCRIB as a body must ensure that appropriate sanctions are imposed on any of its members guilty of unethical practices.
“NCRIB and other insurance industry bodies should collaborate more to deepen insurance penetration in Nigeria while the council also plays a key role in advocacy for pro-insurance laws and policies,” he said.
Elumelu urged insurance stakeholders to generate more awareness and showcase the value of insurance to the public, promoting participation, especially in the retail space.
According to him, insurers must bridge the knowledge gap if they are to make insurance attractive to Nigerians.