- The National Insurance Commission has issued the Nigeria Police Force Insurance Company Limited with an operational licence
- The licence was issued despite objections from stakeholders
- A former NAICOM CEO, Mohammed Kari, argued that the licence issuance will set a concerning precedent for the sector
The National Insurance Commission (NAICOM) has issued an operational licence to Nigeria Police Force (NPF) Insurance Company Limited to begin general insurance business in the country, despite objections from industry stakeholders.
NAICOM disclosed this in a post shared on its official X account on Friday, November 29.
It said the NPF Insurance Company Limited was issued the operational licence after successfully fulfilling all registration requirements.
The Commissioner of Insurance and Chief Executive Officer, NAICOM, Olusegun Ayo Omosehin, handed over the licence to NPF Insurance in his office in Abuja.
Omosehin congratulated the company and expressed optimism that it will contribute to the development of Nigeria’s insurance sector.
The NAICOM post read, “NAICOM today, November 29, 2024, presented an operational licence to NPF Insurance Co. Ltd to commence general insurance operations in Nigeria, having successfully fulfilled all registration requirements.”
NPF Insurance Company faced opposition
The issuance of an operational licence to NPF Insurance Company Limited comes despite opposition from stakeholders in the insurance sector who objected to granting licence to the company on many grounds.
Recall that NAICOM announced in July 2024 the commencement of the process of registering the NPF Insurance Company Limited, incorporated on December 24, 2020, after receiving the application.
The news didn’t go down well with stakeholders in the sector, who argued that granting an operational licence to the Nigeria Police Force (NPF) would compromise the enforcement of the six compulsory insurance products in the market.
In response, Omosehin said it has been receiving submissions and reports from the public on objection or otherwise against the registration of the company but that NAICOM would allow the process to go through before stating its position.
The stakeholders, particularly a former Commissioner for Insurance and CEO of NAICOM, Mohammed Kari, said the core operations of the NPF are fundamentally at odds with commercial activities, noting that the primary mandate of the Police is to maintain law and order, not to engage in business ventures.
Kari’s arguments
Kari, in a letter to the commission in August, argued that allowing the Police to operate an insurance company could lead to conflicts of interest and distract from their essential duties.
He said, “The Police is a regulator of sorts, they cannot be enforcing the law on compulsory insurance and be a provider of insurance. The temptation to force motorist to insure with their company will be irresistible.”
The former NAICOM boss added that the structure and ownership requirements stipulated by Nigerian insurance laws and the Financial Reporting Council necessitate a level of expertise that is currently lacking within the nominated Board of Directors and the Police Force.
He said: “The authoritative nature of the police and their potential representation on the Board of Directors could lead to undue interference in the management of the insurance company, compromising its independence and effectiveness.
“Another requirement is a spread in ownership to avoid undue influence on the company by one shareholder. The Nigeria Police Force Investments has a history of mismanagement, as evidenced by the numerous issues surrounding the Nigeria Police Pension Scheme. This history raises significant doubts about the ability of the Police to effectively manage an insurance company, which requires a high level of expertise and know-how.”
Kari further noted that granting a licence to the company would set a concerning precedent and lead to the proliferation of government-run insurance companies, which could undermine the integrity and stability of the insurance sector and reverse the government policy of divesting from the business.
Ogun Government mandates insurance for buildings over two stories
Meanwhile, TheRadar reported that the Ogun State government declared that all buildings exceeding two stories are required to obtain an All Risk Insurance Policy Certificate.
This was disclosed by the state’s Commissioner for Physical Planning and Urban Development, Olatunji Odunlami, during a stakeholders’ meeting at the Olusegun Osoba Press Centre in Oke-Mosan, Abeokuta on Thursday, September 26.
