By Henry Uche, [email protected]
Former Commissioner/Chief Executive Officer of the National Insurance Commission (NAICOM), Mohammed Kari, has voiced strong opposition to the proposed registration of a Nigeria Police Force (NPF) insurance company.
In a detailed letter dated July 25, 2024, addressed to NAICOM and several prominent figures, including the Minister of Finance, the Chairman of NAICOM, and key leaders of the Senate and House Committees on Insurance, Kari articulates his significant concerns about the establishment of such a company.
Kari, who has had a distinguished career in the Nigerian insurance industry from 1979 to 2023, brings a wealth of experience to his critique. His roles included serving as the Managing Director/CEO of Nigeria Reinsurance Corporation and NICON Insurance Plc, and later as Commissioner for Insurance/Chief Executive of NAICOM. His extensive background as both an insurer and regulator of the Police’s insurance matters lends considerable weight to his objections.
Kari’s letter outlines several core concerns. First, he argues that the core mission of the Nigeria Police Force—to uphold law and order—is fundamentally incompatible with the operational dynamics of a commercial enterprise. He warns that integrating an insurance company into the Police’s portfolio could create significant conflicts of interest. Specifically, the Police’s role in enforcing compulsory insurance laws could lead to potential abuses, where the temptation to leverage their regulatory power to promote their own insurance company might prove irresistible.
Moreover, Kari questions the capacity of the Nigeria Police Force to manage an insurance company effectively. Nigerian insurance laws stipulate rigorous standards for expertise and governance that, according to Kari, are currently lacking within the Police Force’s board and leadership. The historical mismanagement of the Nigeria Police Pension Scheme further exacerbates concerns about the Police’s ability to handle the complexities of an insurance business.
Kari also cautions against the potential disruption this new venture could cause to the existing insurance sector. The entry of a Police-run insurance company might fragment the industry, resulting in inefficiencies and data loss that could undermine the stability and integrity of the sector. Kari emphasizes that approving this proposal could set a troubling precedent, potentially prompting other government agencies to seek similar licenses, which could further destabilize the insurance market and counteract the government’s divestment policy.
In light of these concerns, Kari strongly urges NAICOM to reject the application for the Nigeria Police Insurance Company Limited. He argues that it is crucial to keep the Police focused on their primary law enforcement duties and ensure that the insurance sector remains under the management of entities with the appropriate expertise and independence.
In response to Kari’s objections, Mr. Gus Wiggle, President and Chairman of the Governing Board of the Risk Managers Society of Nigeria (RIMSON), suggests a nuanced approach. He asserts that if the Nigeria Police meet the requirements stipulated in the Insurance Act 2003, they should be granted the right to establish an insurance company. Wiggle advises NAICOM to carefully consider both Kari’s objections and the Police’s proposal, stressing the importance of insurance penetration in Nigeria. He urges that the Police be given a chance to address Kari’s concerns and provide evidence of their capability to manage an insurance company effectively.
Conversely, Mr. Ray Akalonu, a risk management expert and former president of RIMSON, advises the Nigeria Police to refrain from entering the insurance business. He highlights the Police’s struggles with managing the Nigeria Police Microfinance Bank as an indication of their limited capacity for risk management. Akalonu advocates for the involvement of specialized professionals in the insurance sector and suggests that the Police should focus on their core law enforcement functions and seek to improve their existing operations.
The discussion around the registration of a Nigeria Police insurance company reflects broader issues concerning the intersection of law enforcement and commercial interests within Nigeria’s insurance sector.As NAICOM reviews the proposal, the considerations and recommendations of experienced industry professionals like Kari, Wiggle, and Akalonu will play a crucial role in shaping the future of this contentious issue.