NAICOM, FMBN strengthen partnership to boost mortgage insurance
The National Insurance Commission (NAICOM) and the Federal Mortgage Bank of Nigeria (FMBN) has agreed to work together towards ensuring that all mortgages are properly insured.
Both regulatory agencies further agreed to enforce compliance with Section 5(2) of the NHF Act, which “prescribes that every registered insurance company shall invest a minimum of 20 percent of non life funds and 40 percent of life funds in real property development of which not less than 50 percent shall be paid into the NHF through FMBN.”
The landmark partnership would provide mutual benefits to both parties by helping on the one hand, to boost insurance penetration and the other hand, provide scarce funds required by the National Housing Fund to enable it bridge the huge housing deficit among others.
Speaking at a meeting between both organisations in Abuja, Commissioner for Insurance/Chief Executive, National Insurance Commission (NAICOM), Mohammed Kari commended the initiative.
He said: “I think the most important thing is the synergy we are trying to create to ensure that what is due to the mortgage sector goes to the mortgage sector.”
He noted that the Managing Director/Chief Executive, Federal Mortgage Bank of Nigeria (FMBN), Gimba Ya’u Kumo had “promised us that all mortgage must be insured which is what the law expects but has not been enforced.”
He said: “The primary mortgage institutions, through his organisation will ensure that every mortgage is insured properly and every finance in that sector is insured properly. And that is going to be a big boost to the insurance industry as it’s going to increase penetration and provide more funds to the national housing fund to be able to invest in their projects.”
He said: “So we will see it as a win-win situation. And what we can do as a regulator is to ensure that all our operators comply with the law, whether they like it or not-that’s what laws are for and we believe it will help also in reducing the deficit in housing.”
According to the FMBN boss, “We have today agreed that to some extent, NAICOM would try to talk to the insurance companies to see how much of that is coming to the table.
“I can assure you that with what we’ve done today, between NAICOM and FMBN, we’ve tried to sanitize the two industries to bring to the table, how these industries can be moved forward.
He said the additional funds expected to be generated would help to significantly reduce the housing deficit. “FMBN would soon introduce an innovative product to make housing more affordable to Nigerians.”
“We are coming up with what we call rent run. As you are paying your rent, when you finish payment for the cost of the house, the house becomes yours.”
He said:”That has been the practice all over the globe, so we would start to implement some of these international best practices so that Nigerians would have comfort.
“We can’t allow this situation of Nigerians paying for rent year-in-out to landlords that own houses across the nation.
“Nigerians should begin to have sense of themselves, becoming landlords and this is our vision and I’m happy that the level of cooperation we have received today, tells us that we’ll reach the destination.”