Insurance brokers have accused federal and state governments of constituting a major set back to the growth of the insurance industry through owing of huge outstanding premium to the industry.
The brokers reacting to accusation that their often failure to remit premium collected from the insuring public to insurers is a major set back to the growth of the industry accused federal and state governments of withholding over 80 percent of the industry outstanding premium.
According to the brokers, government is owing the industry the highest outstanding premium for a very long time and blamed the National insurance commission (Naicom) for not helping the insurers to collect this huge amount from government.
Mr. Bola Tinubu, managing director SCIB insurance brokers speaking on behalf of the brokers at the 2010 brokers’ forum organized by the industrial and General insurance plc IGI said brokers have no apologies for most of the unethical practices going on in the industry most of which are blamed on them.
He listed some of these often talked about malpractices as overriding commission, rate cutting , non remittance of premium among others saying brokers do not indulge in these malpractices in the real sense of it. According to him, while brokers are accused of rate cutting they do not actually cut the rate rather what they do is as whole sale buyers of insurance they try to bit down the price to get the cheapest price for their client who approach them to buy the policy for them as insurance technical experts,
He said if this is what the underwriters refer to as rate cutting, they are making mistake because brokers have to protect the interest of the insuring public who put their trust in the expertise of the brokers..
He blamed Naicom for not advising government properly on the need to make provision for their insurance bills and for not making case for payment huge outstanding debts owed tothe insurers by government.
Just recently, investors in the insurance industry raised alarm that a larger part of their invested fund has been seized by insurance brokers in form of outstanding premium.
The investors lamented that the fund Which if ploughed into the operations of insurance companies they invested in would have resulted to a higher dividend cautioned insurers over the use of brokers that are fund of withholding their premium.
Shareholders of Custodian and Allied Insurance plc who made this observation at the 15th annual general meeting of the company held in Lagos warned against further transaction of business with such brokers.
According to them, such brokers are out to kill the industry as they collect these premium and divert to their own businesses only to run to the insurers when claims occur.
They also kicked against government management of unclaimed dividend as proposed in a bill before the National Assembly saying such money should remain in the coffers of individual companies until the owners come for them.
The investors caution on outstanding premium in the hands of brokers is coming on the heels of recent directive by the insurance industry regulatory authority the National insurance commission (Naicom) in which it mandated the insurers to write off every debt that is longer than one year.
This according to the commission is because some insurance firms use the issue of outstanding premium to deceive Nigerians on their strength.
It will be recalled that one of the lingering problems that has been delaying the growth of insurance industry is huge outstanding premium by both the insuring public and the brokers.
Before now the federal Government and state governments were the firs culprit to the extent that the industry now has determined to strictly apply its no premium no cover law in its transactions with government at all levels.
