Bill to reform Nigerian insurance industry passes second reading at Senate

A bill seeking to reform and regulate insurance sector policies has passed the second reading at the Senate.

The bill was passed on Thursday during the plenary after many of the senators supported it when it was put to vote by the Deputy Senate President, Barau Jibrin, who presided over it.

The deputy senate president, thereafter, referred it to the Committee on Banking, Insurance and other Financial Institutions.

Mr Barau directed the committee to report to the Senate in one month.

The bill

The bill was sponsored by Adetokunbo Abiru (APC, Lagos East).

Mr Abiru, in his lead debate, said the existing Insurance Act does not promote enforcement of regulations on the government and its agencies.

The senator explained that the bill would force government agencies to insure their assets and employees if passed adequately.

“There are six classes of compulsory insurance but enforcement is weak. A more effective enforcement framework will provide a substantial staple premium business for the industry. A new provision is also recommended in the bill to ensure adequate insurance of government assets and employees,” he said.

Mr Abiru also said the bill would introduce revised minimum capital requirements for insurance institutions.

He also noted that the bill would enhance good corporate governance to ensure transparency and boost investors’ confidence.

The senator also said the bill would ensure good market conduct, fair trade and competition.

Contributions

Sani Musa (APC, Niger East) said the insurance industry is “dying” and that the industry had been operating without a proper description.

Mr Musa noted that insurance takes a high percentage in other developing countries.

He specifically said that 95 per cent of vehicles in the country are not insured before driving on the highway.

The senator also noted that the insurance reformation bill would develop the country’s revenue.

Binos Yaroe (PDP, Adamawa South) said the bill would allow the federal government to regulate the insurance sector.

Abdul Ningi (PDP, Bauchi Central) described the bill as brilliant legislation.

Mr Ningi said insurance was at the same level as the banking sector in the past but noted that many Nigerians need help understanding what insurance is again.

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Victor Umeh (APGA, Anambra Central) said the significant challenge in the insurance industry is the inability to settle claims between the insurance companies and the insured.

After the contributions, the deputy senate president commended Mr Abiru for sponsoring the bill, saying it was a welcome development.

He passed the bill to vote for a second reading, and most senators voted in support.