Government, insurers failing Nigerian markets

Government, insurers failing Nigerian markets

Government, insurers watch as Nigerian markets failing

By Chris Agabi

A chilling recent statistics released by the National Association of Nigerian Traders (NANTS) said 600 people were killed, 49 major markets burnt and over 10, 000 shops destroyed from the 1 December 2010 Minna Niger State shopping complex fire to the 26 March 2016 Birnin Kebbi Central Market fire incidents. According to NANTs, this six year period market fires saw over N3 trillion worth goods and properties consumed by the fires.

Worst still, none of these loses is mitigated as none of the markets have any form of insurance. The fires left the trader devastated, traumatized and relied on governments, albeit unnecessary if they had insurance, to provide them support – the support that often times don’t come. Even where it does, half is pilfered by government officials, a situation that would have been avoided if they had some insurance.

President of NANTS Barrister Kenneth Ukaoha revealed at a press conference recently in Abuja that “apart from loss of lives recorded goods and properties worth over N3 trillion, none of the affected markets have insurance coverage and only about 12 percent of the fire incidents attracted governments’ sympathy visits. Also of the promises made by the visiting government officials, only about three percent are kept. Yet traders in Nigeria contribute the nation’s second largest revenue base from import duties and sundry taxes/levies after oil,” Ukaoha said.

There is no statistics to suggest any market in Nigeria has any insurance cover. The Nigeria Insurers Association (NIA) doesn’t have that record neither has the National Bureau of Statistics (NBS).

Indeed without functioning markets, a state would lack the necessary commercial activities associated with huge consumption possibilities required for growth. Thus a critical aspect of our economy is left vulnerable with little or no attention to make it less risky.

However, legally, no market should be without insurance in Nigeria as the Insurance Act 2003 has made insurance of markets and other public buildings compulsory, a provision that is not being enforced by the insurance regulator, the National Insurance Commission (NAICOM), because it lacks the legal backing to enforce. The law enforcement agents and the Nigerian Fire Service who have the legal rights to enforce fire insurance have not done so.

Section 65(1) of the Insurance Act 2003 says “every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood;

(2) ‘Public Building’, in this section includes a tenement house, house, hostel, a building to which members of the public have ingress and aggress for the purpose of obtaining educational or medical service, or for the purpose of recreation or transaction of business;

(3) The insurance policy under subsection (1) shall cover the legal liabilities of an owner or occupier of premises in respect of loss of or damage to property or bodily injury or death suffered by any user of the premises and third parties;

(4) 0.25 percent of the net premium received by every direct insurer on policies issue under subsection (1) of this section shall be paid quarterly by every insurer into A Fire Services Maintenance Fund which shall be established, administered and disbursed by the Commission (NAICOM) for the purpose of providing grant or equipment to institutions engaged in firefighting services;

(5) An insurer who defaults in making payment as required under subsection (4) of this section commits an offence and is liable to on conviction to a fine ten times the amount the payable provided that persistence in noncompliance with the provision shall be a ground for the cancellation of registration of an insurer.

Thus, beyond the fact that fire insurance of public places is mandatory, the law also allocate some percent of the premium to the Fire Service to aid their operations. The Fire Service hasn’t demonstrated excited over the funds as they are not even accessing the little that is accrued to the account.

Although recently, the Commissioner for Insurance, Alhaji Mohammed Kari disclosed that a major shift would soon occur in the enforcement of the several compulsory insurances in Nigeria.

He said the Commission has written to the relevant authorities and something would happen soon. Indeed it will be exciting to see the reforms occur so some of the losses being currently experienced on fires, building collapse and deaths would be mitigated.

Speaking on the issue; the Director General Nigeria Insurers Association (NIA) Mr. Sunday Thomas said he is not aware any market in Nigeria has insurance cover.

Speaking on the recent Kano Central Market fire which destroyed property estimated at about N2 trillion he said “I’m not sure if the market has any insurance but I doubt if it does. But it would be disastrous if such a monument of a Kano market doesn’t have insurance.”

He agreed insurance awareness is still low but chided Nigerians for not seeing insurance as critical. “But I believe the market might have received some form of awareness on insurance in the past. Unfortunately, a lot of Nigerians are still seeing insurance as additional cost rather than a benefit to their businesses.”

“But again, I think the state government should insure the structures in their markets. Then the states can also encourage the shop owners to insure their wares” he said.

“I agree more insurance awareness needs to be created across the country. As NIA we can do national awareness creation and we’ve done that a bit in the past. We can’t go to the individual markets even though we have done that in Lagos. We need to do more” he noted.

Mr. Tope Adaramole, Assistant Executive Secretary, The Nigerian Council of Registered Insurance Brokers (NCRIB), said the Kano market fire is quite unfortunate and devastating.

“It is definitely a setback for the people affected as it has eroded the needed capital needed for their existence and increased the poverty rate in the country” he said.

According to him, “the NCRIB had taken some giant strides in the past to reach out to the market men and women through their associations, believing that this was the only way to maximize our efforts. We had visited the Iyaloja of Nigeria based in Lagos in order to explore the possibility of partnership. We also mandated all our Area Committees and Chapters to embark on similar strategic engagements in their respective areas across the country, which they are already doing.

Similarly, we are working closely with relevant institutions on micro insurance to capture the market” he said.

But as it stands now, these efforts haven’t begun to yield results as Nigerian markets are not insured.

How to access pension benefits with ease – Leadway Pensure

By Chris Agabi

Leadway Pensure PFA has given some tips to retirees on how to access their benefits without hitches.

The contributory pension scheme provides a framework for access to retirement benefits on the basis of either of the following: mandatory retirement; compulsory retirement; retirement on medical grounds and death.

The tips by Leadway Pensure in a statement to contributors said that retirees must ensure they have only one Retirement Savings Account (RSA) with a PIN associated with them and in the case of changing jobs, they should move their accounts to the new place of work and not open a new RSA with a another PFA. Only the first registration PIN is valid and this is based on the premise that multiple registrations are illegal.

It said where multiple RSAs are detected, it will result in reconciliation challenges and delays upon retirement as both accounts will need to be merged and reconciled before processing for retirement benefits can commence.

In the case of unfunded/under-funded accounts, the statement noted that the onus lies with the client to ensure his pension deductions are remitted into his or her RSA on a monthly basis. If this is left until after retirement, it will give rise to delays especially in the case of public sector clients.