Weak Insurance Firms to Go
- By Simeon Ogoegbulem
- Published November 8th, 2009
- News
- Unrated
Indications have emerged that a very strong quake may soon visit the insurance industry. BusinessWorld Intelligence can disclose that at the end of the quake, insurance companies with weak financial base may be swept off their feet.
Remi Babalola, minister of state for finance has therefore urged the national Insurance Commission (Naicom) to ensure that only insurance companies with adequate capital base are allowed to operate in the system.
Babalola, who gave the charge while receiving the report of the committee set up to review various insurance laws in the country, said government will not allow any company that does not have the necessary capital to operate.
“We will not allow any company that has no business to be in business to remain as such companies will only be a pollutant to the whole system,” he said.
The minister, who refused disclose the high points of the recommendations of the committee, headed by Professor Joe Irukwu, said different segments of the industry and other stakeholders will make an input into the recommendations of the committee before it is finally released as law.
The Irukwu-led committee was set up last March to, among other things, examine all existing legislations in the insurance industry, with particular reference to the Insurance Act of 2003 and the Naicom Act of 1997. The committee was also mandated to determine the adequacy or otherwise of these legislations.
The committee was also mandated to determine the appropriateness’ or otherwise of all such legislations for the efficient operation of the insurance industry in Nigeria, identify aspects of these laws that constrain optimal performance as well as examine all other aspects of insurance legislations that may assist in enhancing the performance of the insurance industry in Nigeria.
Earlier, Irukwu, while presenting the report, observed that the present Insurance Act encourages delay in punishing offenders, thereby promoting market indiscipline. He said that the committee made provisions for the promotion of corporate governance and responsibility.
Remi Babalola, minister of state for finance has therefore urged the national Insurance Commission (Naicom) to ensure that only insurance companies with adequate capital base are allowed to operate in the system.
Babalola, who gave the charge while receiving the report of the committee set up to review various insurance laws in the country, said government will not allow any company that does not have the necessary capital to operate.
“We will not allow any company that has no business to be in business to remain as such companies will only be a pollutant to the whole system,” he said.
The minister, who refused disclose the high points of the recommendations of the committee, headed by Professor Joe Irukwu, said different segments of the industry and other stakeholders will make an input into the recommendations of the committee before it is finally released as law.
The Irukwu-led committee was set up last March to, among other things, examine all existing legislations in the insurance industry, with particular reference to the Insurance Act of 2003 and the Naicom Act of 1997. The committee was also mandated to determine the adequacy or otherwise of these legislations.
The committee was also mandated to determine the appropriateness’ or otherwise of all such legislations for the efficient operation of the insurance industry in Nigeria, identify aspects of these laws that constrain optimal performance as well as examine all other aspects of insurance legislations that may assist in enhancing the performance of the insurance industry in Nigeria.
Earlier, Irukwu, while presenting the report, observed that the present Insurance Act encourages delay in punishing offenders, thereby promoting market indiscipline. He said that the committee made provisions for the promotion of corporate governance and responsibility.
