Senate has passed the 2014 Nigerian Insurance Industry Reform Bill.
By Haruna Salami
Senate has passed the 2014 Nigerian Insurance Industry Reform Bill.
This followed adoption of report of Committee on Banking, Insurance and other Financial Institutions presented by the Chairman, Senator Abiru Adetokunbo (APC-Lagos) at plenary on Tuesday.
Senator Adetokunbo, while presenting the report said the bill sought to essentially consolidate various exiting legislations regulating the conduct of insurance businesses in Nigeria.
He listed the legislations to include the Insurance Act 2003, the Marine Insurance Act, Motor Vehicles Third Party Insurance Act, the National Insurance Corporation Act and the Nigerian Reinsurance Corporation Act.
According to him, another major objective of the bill was to enable Nigeria have a better future for themselves and the need for a robust legal and regulatory framework that would see insurance sector contributing positively to principal objective of financial assistance practices.
According to him, “to make Nigeria, Africa’s financial hub and one of the 20 largest economies in the world, there was need to involve effective risk-based supervision in regulatory system.
“The existing rule-based supervision, enabled by the current laws in the insurance sector had become obsolete.
Adetokunbo said during the public hearing, stakeholders made “far-reaching presentations” in support of the passage of the bill, adding that the general consensus among stakeholders was that laws regulating the industry were obsolete.
He said there was need to upscale the industry’s potential to compete globally, adding that the current insurance legislations do not resonate with the current dynamics and evolving needs of the Nigerian insurance industry.
“All these legislations have surpassed a two-decade mark and they lack provisions that can adequately address contemporary challenges and support growth and innovation within the industry,” he said.
He said “the legal obsolescence has led to some of the regulatory inefficiencies in the insurance industry.
“These have also hampered the industry’s ability to successfully compete on a global level”.9
He urged the Senate to pass the bill, nothing that its passage would help provide a comprehensive legal framework for the regulation and supervision of all manner of insurance initiatives in Nigeria.
In his contribution, Senator Jimoh Ibrahim (APC Ondo South) noted that the provision of the bill on minimum capital requirements for reinsurance business to the turn of N45 billion was not in order, given the current economic situation .
He urged the Senate to consider maintaining the status quo on minimum capital requirements for reinsurance business in the interest of the industry.
Ibrahim’s suggestion for a return to status quo for reinsurance business was however not endorsed by senate during the clause by clause consideration.
Deputy President of Senate, Senator Barau Jibrin (APC-Kano North), who presided plenary after passage of the bill commended the committee for a job well done.
According to him “This Act, when it has the concurrence by the House of Representatives and certainly the assent of Mr. President, the law will really help in shaping our economy for the better.
“All over, whatever has to do with any economy is dynamic, economies change at all times. Therefore, it is incumbent on the authorities of every nation to recraft their legislations to go in tandem with contemporary realities.
“This is what has been done by the passage of this legislations. The intent is to restructure the entire insurance ecosystem, in the way that it will go in tandem with contemporary realities.
“I am sure the country will benefit from it, when the law is eventually assented to”.
