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In response to public concerns over the establishment of NPF Insurance Limited, the National Insurance Commission (NAICOM) has provided clarity on its decision to license the Nigerian Police Force’s (NPF) insurance company. Commissioner for Insurance, Mr. Olusegun Omosehin, addressed the matter during a media briefing in Lagos, acknowledging the diverse opinions surrounding the issuance of the license.
Mr. Omosehin stated that NAICOM is closely monitoring the discourse and will allow the process to unfold before taking a definitive stance. He emphasized that while NAICOM remains open to licensing new insurance firms, all applicants must meet the stringent requirements set forth by the commission.
One prominent voice opposing the licensing of NPF Insurance is former Commissioner for Insurance, Mohammed Kari. In a letter dated July 25, addressed to the current Commissioner for Insurance, Kari expressed his strong objections, citing several concerns. His letter was also sent to key stakeholders, including the Minister of Finance, the Chairman of NAICOM, the Chairmen of Senate and House Committees on Insurance, and the Director-General of the Bureau of Public Enterprises (BPE).
NAICOM had earlier announced the receipt of an application from NPF Insurance Company Limited and invited the public to submit any objections within a 21-day period.
Kari, who has 44 years of experience in the insurance industry, outlined several critical concerns in his objection. He argued that the core functions of the Nigerian Police Force are incompatible with commercial activities, particularly in the insurance sector. He stressed that the Police’s primary mandate is to maintain law and order, not to engage in business ventures. According to him, allowing the Police to operate an insurance company could lead to conflicts of interest and distract them from their essential duties. Kari also highlighted the potential risks of the Police enforcing compulsory insurance laws while simultaneously acting as a provider of insurance services.
Kari further pointed out the lack of expertise within the Police Force and the nominated Board of Directors of NPF Insurance to meet the stringent requirements of Nigerian insurance laws and Financial Reporting Council regulations. He expressed concern that the authoritative nature of the Police could lead to undue interference in the management of the insurance company, compromising its independence and effectiveness.
Citing the historical mismanagement of the Nigeria Police Pension Scheme, Kari questioned the Police’s ability to effectively manage an insurance company, which requires a high level of expertise. He also warned that the fragmentation of the insurance business could result in the loss of valuable data and income for the industry.
Kari expressed doubts about the viability of a captive insurance company for the Police, citing insufficient business spread, expertise, and reputation to support its survival. He also raised concerns about the Police’s ability to operate under regulatory oversight, given their command-and-control nature, and recalled past instances where the Police resisted regulatory directives.
Approving the application, according to Kari, could set a dangerous precedent, encouraging other government agencies to seek similar licenses. He cautioned that this proliferation of government-run insurance companies could undermine the stability of the insurance sector and reverse the government’s policy of divesting from business activities, which led to the creation of the BPE.
NAICOM had listed the proposed board members of NPF Insurance Company Limited, including Oke Temitayo as Managing Director/CEO, alongside other high-ranking officers and individuals from the Police Force.
Kari urged NAICOM to reject the application, emphasizing the importance of maintaining the Police’s focus on their primary responsibilities and ensuring that the insurance sector remains managed by entities with the requisite expertise and independence.
Kari’s extensive experience includes serving as Managing Director/CEO of Nigeria Reinsurance Corporation and NICON Insurance Plc, as well as Commissioner for Insurance at NAICOM. He has also worked as a consultant and has firsthand experience as an insurer to the Nigerian Police Force, a reinsurer to their insurance providers, and a regulator.
In addition to Kari, other stakeholders have voiced their objections to the application, arguing that the Police should concentrate on their core responsibility of ensuring the nation’s security.
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