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Tuesday, March 21, 2023

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Insurance CEOs Query 10-Year Tenure Draft

Chief executives of insurance firms in the country have sharply disagreed on the draft legislation by the National Insurance Commission (NAICOM) for CEOs to leave office after 10 years. A similar measure was executed in the banking sector under Mallam Sanusi Lamido Sanusi. Many CEOs who craved anonymity queried the rationale for the measure by NAICOM, insisting that insurance should not equated with the banking sector.

But the Nigerian Insurers Association (NIA), the umbrella body of insurance firms in Nigeria have yet to address the issue and take an official position.

A CEO told Business Journal: “As an umbrella body, we are yet to address that issue. But to me, we should not copycat what is happening in the banks and look at our own insurance industry. There is a tendency of this copycat policy. I say no. We should go beyond copycat.

We should not just replicate the policy in banks in the insurance sector. In insurance, the older you are, the more advanced you are in addressing insurance issues. “

He said it is wrong for the insurance regulator to contemplate asking people of about 50 years to retire from practicing insurance, when insurance professionals abroad remain in the industry even after the age of 70.

“That is what makes insurance more of a profession than as a business- unlike banking.” Another chief executive also asked whether the draft legislation will bar a CEO from moving from Firm A to Firm B as CEO after serving 10 years in Firm A. He equally raised the issue of brokers, who are proprietors of their business concerns.

The CEO said: “The 10-year tenure for insurance CEOs is not what we need today in the industry. We want NAICOM to collaborate with operators to deepen insurance penetration in Nigeria. This will generate more businesses for operators and ensure sustainable growth of the market. In all fairness, this idea (10-year tenure for CEOs) is not necessary at this stage of the industry.”

Mr. Femi Oyetunji, Group Managing Director/CEO, Continental Reinsurance Plc, said the industry needs such legislation in the context of good corporate governance. He said however, that operators are expecting the industry body, NIA to speak on the issue.

“Personally, corporate governance should be number one. NAICOM is going in the right direction in bringing up a document in this regard,” Oyetunji said. “As an industry, where we are right now is that the draft legislation is up for discussion. And l’m aware that many operators have been making comments on the draft guidelines. At the end, we expect that NIA, which is the umbrella body in the industry, would be able to speak on the matter.”

Business Journal
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