Stakeholders sustain objection to proposed registration of Nigeria Police Insurance Company Ltd

…As former Commissioner for Insurance Kari leads opposition

Major stakeholders in the nation’s insurance industry have joined the growing league of petitioners who have raised serious objections to the planned registration of Nigeria Police Force Insurance Company as a commercial entity authorized to conduct insurance business in the country. In raising the objections, the stakeholders many of who are either practitioners, investors or former heads of regulatory agencies point to possible conflict of interests should the Nigeria Police Force be allowed to incorporate a legal entity which would be conducting such commercial activities as insurance business.

One of the key observations by the opponents of the registration of the insurance company which is been proposed to function as NPF Insurance Company Limited is that the core operations of the Nigeria Police Force are fundamentally at odds with commercial activities.

The first person to throw the wage against the registration of such an institution is the former Commissioner for Insurance Alhaji Muhammed Kari who was quick to observe that “the primary mandate of the Police is to maintain law and order and not to engage in business ventures. Allowing the police to operate an insurance company could lead to conflict of interest and distract from their essential duties. The Police isa regulator of sorts, they cannot be enforcing the lawon compulsory insurance and be a provider of insurance. The temptation to force motorists to insure with their company will be irresistible”.

It would be recalled that the National Insurance Commission (NAICOM), a body charged with the responsibility of registering, supervising and regulating the business of insurance companies in Nigeria had requested for any possible objection to the registration of NPF Insurance Company Limited following the receipt of an application to that effect.

Investigations and inquiries conducted by Daily Champion revealed that many stakeholders have continued to pump out  [petitions and objections to the proposed registration of NPF Insurance Company with many of them expressing serious concerns on the possible breach of the ethics and standard operational procedures on the part of the managers of the proposed company considering the antecedents of the police in handling commercial cases.

Immediate past president of the Chartered Insurance Institute of Nigeria Mr Edwin Igbiti is among the league of opponents of the registration of NPF Insurance Company Limited as he contended that everything was wrong with the idea and its implementation. Mr Igbiti stated that he is in total support of all the views put forward by Alhaji Kari in objecting to the move.

Recall that one of the earlier letters of objection which was written by a chieftain of the insurance profession who have served the industry for over 40 years as both a player and a regulator in the person of Alhaji Kari had observed that both the structure and ownership requirements stipulated by the Nigerian insurance laws and the Financial Reporting Council necessitate a level of expertise that is currently lacking within the nominated board of directors and the police force. He had gone further to observe that the authoritative nature of the police and their potential representation on the board of directors of such a company could lead to interference in the management of the insurance company thus compromising independence and effectiveness.

“The command-and -control nature of the police force would make them take offense of a caution by a regulator. I don’t see how the police can operate under someone’s regulation, for they would not accept commercial directive, and neither would they observe regulatory control. It would compromise the authority of the regulator if one company is seen to ignore regulatory control or out rightly disregard them, the regulator would lose his authority to regulate the market”, AlhajiKari who served as the Managing Director and Chief Executive Officer of both NICON Insurance and Nigeria Reinsurance Corporation had deposited.

Alluding to his fears of a NPF Insurance Company Limited not likely to play by the rules if registered,  the petitioners recalled that “When I was an operator and their insurer, the NPF as a consumer had detained a head of a department and I, the CEO when we rejected to pay for a lose that was not insured on their policy. Can the CEO of an NPF Insurance Company refuse to pay any demand of his owner, whether insured or not?

“When I was a regulator, the NPF as a consumer, have requested on many occasions to obtain waivers to bypass the Nigerian insurance industry to place their businesses directly abroad, and on all occasions, we have refused them. These requests were made against the advice of their broker and insurer. I can just imagine what they would do as a registered insurance company.

“Approving the application could set a concerning precedent. It may encourage other government agencies such as the Federal Road Safety Corps, Nigeria Customs Services, Nigerian Army, Navy, Air Force, Nigeria Civil Defense Corps, Office of the Head of Service of the Federation and others to seek similar licenses. The Commission can therefore not refuse them. The proliferation of government-run insurance companies could undermine the integrity and stability of the insurance sector and reverse the government policy of divesting from business which as you remember was the reason of the creation of the Bureau for Public Enterprise, I suggest you seek the opinion of the Bureau as you continue with your consideration”.

Copies of similar  letters of  objection for the registration of NPF Insurance Company Limited copies of which were made available to the chairman of NAICOM, chairman of Senate Committee on Banking, Insurance and Other Financial Institutions, chairman, House Committee on Insurance and Actuarial Matters, Director General of the Bureau of Public Enterprise as well as the chairman of the Nigerian Insurers Association.

Still habouring the fear of what could happen to the nation’s insurance industry if the NPF Insurance Company was licensed, the petitioners said that the police lack enough captive accounts within its rank as to suggest that the proposed company would not be tempted from competing for other businesses, an adventure which will likely dilute and indeed pollute the standards of engagement in the market place.

A top executive council member of the Nigerian Council of Registered Insurance Brokers (NCRIB) who pleaded anonymity had argued that “this move is completely against global norms where governments are not usually part of the running of business. And if you look at the antecedents of the police and the institutions and businesses which they have been engaged in you will observe lots of abuse and mismanagement by the police high command.  View this as an unsavouring development on several grounds which should not be allowed to take root. Police is an enforcer of law to which insurance business is part of; therefore the police setting up an insurance company will make them look like the referee becoming a player in the field. Who will enforce the law and in which direction”, the officer asked.

“Considering these concerns, I strongly urge the National Insurance Commission to reject the application for the registration of the Nigeria Police Force Insurance Company Limited. It is imperative to maintain the focus of the police on their primary responsibilities and to ensure that the insurance sector remains managed by entities with the requisite expertise and independence”, Alhaji Kari submitted.