Bill to create parallel regulator for insurers lands in stormy waters

The decision of insurance brokers to self-regulate, creating a parallel regulator in the sub-sector, is causing cracks in the industry.

The move which has run into stormy waters is pitting members of the Nigerian Council of Registered Insurance Brokers (NCRIB) against the current governing council of the market association and is pressuring its president, Ayodapo Soderu, to save his position.

This issue, BusinessDay learnt, will top the agenda at the next meeting of the Insurance Industry Consultative Council (IICC) of which the NCRIB is a member. The meeting is scheduled to hold in Lagos, on Wednesday 19, November.

The brokers, under the umbrella of the NCRIB, are pushing for an act in the National Assembly to create an Institute of Chartered Insurance Brokers, and transform it from its current status as a market association, to a regulator.

The Bill, SB 507 was enrolled in the Senate on 26 June this year, and has passed through second reading in the chamber. It is a private bill being sponsored by Gbenga Kaka from Ogun state.

The brokers state their aim in section 2 of the Bill, which experts say is tantamount to running parallel to the industry regulator, the National Insurance Commission (NAICOM) and the educational arm of the industry, the Chartered Insurance Institute of Nigeria (CIIN). These two bodies are creations of an act of parliament.

Section 2 of the Bill stipulates the duties of the institute when it is finally created, to include establishing and maintaining a central organisation for all insurance brokers, and “enrolling persons as chartered insurance brokers.”

Others are “register insurance broking body corporate,” and also to secure in accordance with the provision of this act, the establishment and maintenance of a register of chartered insurance brokers, containing the names, addresses and qualifications and such other particulars as may be prescribed, of all persons who having applied in the prescribed manner, are entitled under the provisions or this act to be registered, and the publication from time to time, of the lists of this persons.”

The institute when created, will further seek “to encourage the dissemination of knowledge, education practical training and research into the profession, establish and maintain a library” and also arbitrate or settle dispute or questions between members and other parties.

“While it will discipline its erring members, the institute will also do such things from time to time, aimed at elevating the status of the chartered insurance brokers and the protection of their interests and procure their general efficiency and proper professional conduct.”

What appears to be a death knell for the anticipated act was at the 21 October Annual General Meeting of the NCRIB in Abuja, where its members condemned the decision of its governing council to transform to a regulator.

A governing council member told BusinessDay, that the Bill was kept away from its members who only learnt of it when others like the Nigerian Insurers Association NIA and the CIIN opposed it.

“We have decided to stay action on it for now. A lot of our members felt that they were not adequately carried along, and besides, some aspects of the Bill were shrouded in secrecy and are also to push the interests of a few of the governing council members.