The Senate yesterday mandated its Committee on Banking, Insurance and other financial institutions to invite stakeholders in the insurance sector to look into recent findings which showed that over 12 million motorists in the country use fake insurance papers.

Stakeholders to be invited according to the resolution of the upper chamber included the National Insurance Commission (NAICOM), registered Insurance companies in Nigeria, relevant law enforcement agencies.

The stakeholder, the Senate said, should urgently deliberate on ways and means of ensuring the strict implementation and compliance with the six compulsory insurance schemes as provided in the Act and invoke sanctions where necessary.

The resolutions followed a motion by Senator Ahmed Salau Ogembe (Kogi Central) and eight others entitled, “Implementation of the compulsory insurance in Nigeria as provided in the ‘Insurance Act Regulation, 2003.’

Senator Ogembe in his lead debate lamented that of the 16 million vehicles in the country, only four million are properly insured.

He noted that the “Insurance Act and Regulation 2003” expressly provides for six compulsory insurance schemes namely: (i) The Third Party Motor/vehicle insurance (ii) Building under construction insurance (iii) Group Life insurance (iv) Public buildings insurance (v) Workman Compensation insurance (vi) professional indemnity insurance.

He further noted that these insurance schemes are made mandatory to take care of third party liabilities arising from the actions or inactions of a person, group/organizations in the course of their activities.

The Kogi Central lawmaker said that he is worried that the country is grossly under-insured “and basically, her citizens do not take advantage of services rendered by this very important sector of the economy as a result of many reasons such as; (a) the existence of unregistered insurance institutions within the system (b) ignorance and gross knowledge gap. (c) apathy occasioned by several factors including mistrust and fear for the whole concept of insurance (d) Poverty.”

Senator Ogembe also said that he is worried that there are presently 58 insurance companies registered with the National Insurance Commission, “yet there are uncountable number of unregistered insurance institutions selling worthless insurance certificates to unsuspecting members of the public.”

“This reprehensible act is mostly manifest in the third party motor/vehicle insurance scheme where such unregistered institutions connive with relevant law enforcement agencies to perpetrate their act,” he said.

He noted that Section 3(a) (b), section 4(1-4) of the Insurance Act, 2003, expressly provides the conditions for the registration of an insurance company in Nigeria, yet these provisions are frequently flouted.

The lawmaker said that he is alarmed at the staggering number of Nigerians who seek for help for various reasons including mishaps at workplace, illnesses traceable to occupational hazards, debilitating injuries and even death as a result of motor accidents, injuries and death resulting from building collapse, despite the
“Building under construction Insurance” and the “Public Building Insurance” as provided in the Insurance and Regulation Act, 2003.

He noted that it is equally disturbing that these Nigerians often have no choice but to have recourse to both the electronic and print media to seek help which more often, do not produce the expected results.

He expressed confidence that if the “Compulsory Insurance Schemes”” are implemented as provided in the Insurance Act, most of challenges raised would be solved.

Senator Ogembe added that he is further convinced that insurance is a huge/serious business and its potential in country towards solving social and economic problems cannot be over emphasized.

He insisted that the Senate should be determined to make necessary changes in the interest of the country and the insurance sector.

Apart from inviting stakeholders to deliberate on the challenges, the Senate also mandated NAICOM to properly orientate the public on the Insurance Policies as stipulated in the Act and make known to the public the 58 registered Insurance Companies through sustained enlightenment in the national media.

It said that the National Assembly should pay more attention to the Insurance sector through appropriate legislation and deliberate actions to raise the status of Insurance in Nigeria to be at par with other sectors such as Banking and Capital Market as well as complying with best practices globally.