Excess taxation on insurance reserves, claims worries operators

The excess taxation on insurance business which undermines the profitability of the industry and its potential for value creation is becoming a source of concern for operators and stakeholders alike.

The operators and stakeholders argue that the existing Companies Income Tax Act 2007 places a heavy tax burden on insurance business with the result that insurance reserves are taxed and claims capped, unlike what is found in most insurance jurisdictions.

George Onekhena, deputy commissioner for insurance, National Insurance Commission (NAICOM), said statutory laws guiding insurance taxation could be amended through appropriate legislative process to help underwriting business in the country.

“What the insurance companies should do is to submit their complaints to Federal Inland Revenue Service and Ministry of Finance for consideration,” said Onekhena, who spoke during the insurance and pension committee programme at the Business Law section of the Nigerian Bar Association annual conference in Lagos.

Dominic Ichaba, partner, Pac Solicitors, who was chairman of the committee on pension and insurance at the conference, said the avenue was provided for credible resource personalities to tackle cogent subjects of discussion at the conference.

Olasimbo Ukiri, managing director, Avon Health Maintenance Organisation, while speaking on the challenges and opportunities in the National Health Insurance Scheme (NHIS), observed that there were proposed amendments to the NHIS Act on mandatory health insurance for employers.

She said a 12-member technical working committee had been inaugurated to draft a detailed roadmap towards achieving universal health coverage for Nigeria in a sustainable manner at the presidential summit on universal health coverage, adding that a major desire for the universal health coverage was to ensure that all people had needed access to healthcare services.

Ukiri said this would ensure prevention of healthcare challenges while promoting good treatment without facing financial ruin because of the need to pay for them, further explaining that health insurance ensures the pool of funds and that critical mass of contribution in the pool was needed for its success.