The Senate on Thursday passed for a second reading, a bill to reform the insurance sector in Nigeria through passage of bill to that effect for second reading.
The bill sponsored by its Chairman, Committee on Banking, Insurance and Other Financial Institutions, Senator Adetokunbo Abiru (APC Lagos East), seeks an Act to repeal the Insurance Act, Cap117 2004, the Marine Insurance Act, Cap M3 Laws of the Federation of Nigeria 2004, the Nigeria Reinsurance Corporation Act, Cap, N131, Laws of the Federation of Nigeria, etc.
According to Abiru, the bill seeks to provide for a comprehensive Legal and Regulatory Framework for Insurance Business in Nigeria and Related Matters.
He decried the low patronage of insurance services in Nigeria, despite being one of the oldest industries in the nation’s financial services sector. He put the patronage rate at 0.5%, ranking 70th globally and 5th in Africa.
Abiru explained that the bill when passed into law, will consolidate various existing pieces of legislations regulating the conduct of insurance businesses in Nigeria such as the Insurance Act, 2003 the Marine Insurance Act, the Motor Vehicles (Third Party Insurance) Act, the National Insurance Corporation of Nigeria Act, and Nigeria Reinsurance Corporation Act.
He said, “The bill principally seeks to provide a robust legal and regulatory framework that will ensure that the Insurance sector contributes positively to the principal objective of the Financial System Strategy to make Nigeria Africa’s financial hub and one (1) of the 20 largest economies in the world; Evolve effective risk-based supervision, in the regulatory system as the existing rule-based supervision, enabled by the current laws has become obsolete.
“Fast track the process of managing weak companies as the existing legislation is not efficient for effective distress management; Review the penalties as the ones prescribed in the existing laws are inadequate and not deterrent enough.”
He added that other objectives of the bill are: The need to ensure ethical practices and international best practices as required by the International Association of Insurance Supervisors, and the need for a legal and regulatory framework that allows the supervisory authority to deal promptly with issues evolving from the dynamism of the insurance business.
All the Senators who contributed to the debate on the bill like Sani Musa ( Niger East ), Victor Umeh (Anambra Central) etc, supported the bill and called for its passage for second reading.
In his remarks after the bill scaled second reading, the Deputy Senate President, Jibrin Barau, who presided over the session, the Senate Committee on Banking, Insurance and Other Financial Matters which is chaired by the mover of the bill to make further legislative inputs into it and report back in four weeks
