The stronghold of insurance brokers over the underwriting arm appears threatened, going by the content of the proposed law on insurance practice, which seeks to question the independence status which they have had over time. On the remote side, insurers have made spirited attempts to bring them under control without success. One area that has raised dusts between the two arms is the issue of ‘no premium, no cover’
Industry watchers believe that the greatest threat coming the way of brokers is the proposal of the Prof. Joe Irukwu – led committee on the review of insurance laws in Nigeria.
The recommendation which has reportedly been submitted to the federal government, is seeking to raise the minimum capital base of insurance brokers at N400million as against the current N10million. According to Mr. .Edward Okusor, chief executive officer of Afromart brokers “this development, if allowed to succeed, would impact negatively on the professional standard of the brokerage arm. He added that the N10million capital requirement has not been easy for the brokers, therefore raising it at this astronomical level would definitely compound the operational environment” He explained that brokers control over 70 percent of the insurance volume of business. Any thing that affects it negatively would certainly cause sweeping effects in the entire industry. For managing director of Best Deal insurance brokers, Mr. Adewunmi Adewole, rather than formulating laws that would threaten the brokerage arm, government should think of enhancing by empowering it just the way it did to the pension industry with the establishment of the National Pension Commission (PENCOM)
It was gathered that in addition to the recommendation to increase the capital base, the laws that grant sovereignty to the brokers would also be reviewed. Commenting on the issue, Prof.Irukwu disclosed that the present insurance laws which has separate framework for some operators may be consolidated into single framework legislation. The implication of this is that a central body may emerge which would break the monopoly of the National Council of Registered Insurance Brokers (NCRIB), as presently constituted.
Already, the proposal has been causing unease within the camp of insurance brokers. Reacting to the proposal, President of the council, Mr. Teslim Sanusi said insurance brokerage does not require the kind of regulations being proposed. He said the arm is similar to other professions like law and advertising among others and they do not require any minimum capital requirement to operate.
The NCRIB boss threatened that the council would oppose any law aimed at destabilizing the oneness of purpose of brokers. He added that such move would be counter productive. Sanusi stressed that the proposed law as it stands now, also seeks to make membership of the council voluntary as against the provisions of the Insurance Act 2003 which makes it compulsory.
Irukwu had earlier explained that the proposed law made provisions for the entrenchment of corporate governance in the profession as well as provisions for dealing with insurance fraud, especially in the area of ‘whistle- blowing.
It would be recalled that insurers in the past have complained over the dominance of brokers in the determination of insurance business which has often led to the crippling of underwriting profit. According to t Mr. G.U.S. Wiggle managing director of Linkage Assurance, at a BGL forum, brokers have ensured a situation which has made premium payment by corporate customers hardly received on time. The result, he said is that the net operating cash flow for insurance companies are low, averaging between 0.5 percent and 19.7 percent. He added that there have been situations when underwriting risks mature while premiums are yet to be received.
Industry watchers believe that the proposed law may confer on THE National Insurance Commission (NAICOM), the expected status as a regulator of insurance, carrying similar powers as that of the Central Bank of Nigeria (CBN).
CBN Pulls Rate Cut Trigger, King Dollar Returns
By Lukman Otunuga, Senior Research Analyst at FXTM,
In a move that caught investors off-guard this week, the Central Bank of Nigeria (CBN) slashed interest rates by 100 basis points bringing the MPR to 11.5%. Given how inflation has been above target since 2015, rates were expected to remain unchanged for the rest of 2020 and possibly early 2021.
The question on the mind of many is whether the rate cut will achieve the desired effect by stimulating consumption and economic growth? Ongoing border closures and disruptions created by COVID-19 have pushed inflation to levels not seen since March 2018 above 13.20% while a drop in the production and price of Oil continues to rub salt into the wound. While looser monetary policy could support growth, it may come at the cost of rising inflation and weaker Naira.
Over the past few months, central banks across the globe have deployed unprecedented measures to defend their respective economies against the coronavirus menace. However, fiscal policy has been identified as the sharper tool with governments across the world providing a critical lifeline to keep the wheels of their respective economies rolling.
Outside of Nigeria, King Dollar made a return by appreciating against every single G10 currency. In times of uncertainty, everyone wants a juicy piece of the world’s most liquid currency. As coronavirus cases rise in Europe and other parts of the world, the flight to safety is likely to boost appetite for the Dollar. This is bad news for many emerging markets currencies, especially those with high Dollar-denominated debt.
On the commodity side, Oil prices remain heavily influenced by demand-side factors and the state of the global economy. Prices are likely to remain stuck around the $40 regions in the near term, especially If another round of possible lockdowns hit Oil demand. Looking at the technicals, WTI Crude is under pressure on the daily charts. If prices are unable to break away from the sticky $40 regions, the next key point of interest remains around $38. A weekly close above $41.50 could pave a path towards $43.
NCC Arrests Man for Hacking into DSTV System
Nigeria Copyright Commission (NCC), has arrested one Mr Aliu Olalekan, for allegedly hacking into DSTV system and watching the channels free without subscription.
Mr Matthew Ojo, NCC Director in the Lagos Directorate Office said this while speaking with newsmen in Lagos, on Tuesday.
He said that the suspect used to watch DSTV channels free without subscription on his Android phone via an app which he downloaded on google play store.
“This suspect distributed the know-how to his telegram followers and on his blog with the aim of gaining more followers and viewership on his blog and makes more money through google ad-sense.
“The operation was based on surveillance which had earlier been carried out by the Multi-choice team and verified by a copyright inspector, ” he said.
He added that the arrest was made in collaboration with a team of copyright inspectors led by the Head of Enforcement Department, Mr Charles Amudipe.
Others included; a team from Multichoice Nigeria led by Mr Umar Ibrahim and policemen from Lagos Command Headquarters, Ikeja.
Ojo said that the joint team conducted an anti-piracy operation at the premises of the culprit in Amukoko, Lagos.
According to him, the suspect was contacted on phone by a member of the operation team on the disguise of patronising him. “The suspect came out to meet the caller and in the process of discussion, he was apprehended.
“The suspect took the team to his resident. The squad paraded his one-room apartment and recovered his laptop and phones used in perpetrating the ungodly act. “He was arrested and brought to the copyright commission office for further investigation, ” he said.
Ojo said that, on getting to the commission’s office, the statement of the suspect was taken and the inventory of items seized from him taken. He said that investigation on the matter was still ongoing and if found guilty the suspect will be charged to court.
NCC, Digital Encode Support NITRA Innovative Tech Forum On Post-COVID-19 Strategies
The Nigerian Communications Commission (NCC), Nigeria’s telecommunications regulator and Digital Encode, Cybersecurity and Compliance advisory company, have indicated interest to partner with the Nigeria Information Technology Reporters Association (NITRA), the national umbrella body of ICT reporters, as it organizes a forum that will x-ray the industry’s future plans for ICT growth post pandemic era.
The event, slated to hold on October 15, 2020, will seek to discuss the needs for a fortified ICT sector after the COVID-19 era, and the level of preparedness of ICT stakeholders to embrace the challenge of being pivotal to the stability and growth of all other sectors.
A statement from NITRA National Secretariat in Lagos indicates that due to the pandemic and need to observe the COVID-19 protocol on social distancing, the event will be held via a Webinar.
This year’s theme, “Multi-stakeholder Approach To National Recovery Post-Pandemic”, is in line with the annual event’s generic theme, ‘NITRA Innovative Tech Forum’, a contribution by NITRA to the development of Information and Communication Technologies (ICTs) innovations and policies in Nigeria.
Prof. Umar Danbatta, executive vice chairman, NCC is expected to deliver the keynote speech at the event and will throw more light on Federal Government’s plans, programmes and policies on post-pandemic strategies using ICT.
Dr. Adewale Obadare and Dr. Seyi Akindeinde, founders of Digital Encode, while accepting to support the event expressed their readiness to offer their expertise in Cybersecurity for organisations to prepare against cyber- attacks with the new normal.
They will also highlight areas that are high risks that need fortification in terms of cybersecurity.
Speaking on the event, Mr. Chike Onwuegbuchi, national chairman, NITRA, noted that as the COVID-19 pandemic continues to leave its negative trails across the globe, economic reboot for countries will not only depend on how well they readapt to the new normal, but also more on their recovery plans.
According to him: “While the federal government has consistently expressed its willingness to set all policies in place to engender growth, and accelerated implementation of these policies, private sector firms have also shown great hunger for the task ahead in post-COVID-19 era.
However, the question that needs to be answered is whether all stakeholders are ready for the required task ahead.”
The event will also offer participating companies opportunities to publicize some of their individual efforts at contributing to reacting a soft landing or lifeline for SMEs and other ancillary companies as the pandemic threatens their survival.
Digital Encode is a multi-award winning and leading consulting and integration firm that specializes in the design, management, and security of business-critical networks, telecommunications environments and other Information Technology (IT) infrastructures.
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