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TUC insists absence of board could derail injury compensation scheme *ASSBIFI urges extension categorisation of insurance firms

Absence of board of the Nigeria Social Insurance Trust Fund (NSITF) and other series of political undercurrents are capable of scaring away contributors to the Employees Compensation Scheme, the Trade Union Congress (TUC) has said.

In a communiqué issued at the end of its National Administrative Council (NAC) meeting held on August 3rd, 2018 at Sheraton hotel, Abuja, TUC said the altercations between government officials are capable of eroding the confidence of the contributors as well as workers that their contributions may be endangered.

The communiqué, which was signed by the President of TUC, Bobboi Kaigama and Secretary General, Musa Lawal, opined that the interests of injured workers should be uppermost in the mind of every stakeholders and not momentary gains.

“The congress observed with dismay the crisis at the Nigeria Social Insurance Trust Fund (NSITF) leading to two public senior officials exchanging words publicly. The NAC further observed that this kind of situation is giving wrong signals to the contributors of the fund and other stakeholders. The congress therefore called on political leaders to put the national interests for setting up the Fund above other interests and urged them to be more cautious in their utterances and action lest we derail the Fund,” the TUC said.

Meanwhile, the January 1st 2019 date set for the implementation of recapitalisation of the 57 insurance firms by the National Insurance Commission (NIC) will lead to loss of jobs, the Association of Senior Staff of Banks Insurance and Financial Institutions (ASSBIFI) has said.

In a letter titled ‘‘Re: Recapitalisation of insurance companies in Nigeria – The Tier-based minimum solvency capital appeal for deadline extension’ with reference number ANS/IIR/EO/YOS/970 dated 15th August 2018 to the Commissioner for Insurance of the, the union said though the move will halt the inability of many insurance companies to honour contractual obligations and the need for restructuring of capital resources for improved liquidity and claims settlement have been on the negative impact on the industry, the aftermath might result to massive job cut in the sector.

The union observed that the move to reposition the industry will enable insurance firms focus on areas of strength thereby deepening market penetration, increase public confidence and attract investors.

The fresh move to recapitalise the insurance requires that the existing 57 insurance firms in the country will now be categorised as high, medium and low players identified as Tier 1, 2 and 3 companies respectively with effect from January 1, 2019.

Despite the urgency needed to ensure the industry operates within the international best practice, the union observed that the January date is too short and may likely be injurious to the sector.

“However, we have analysed the January 2019 deadline given and its capital impact on the industry, its operational impact in the form of higher regulatory compliance cost, its business strategic impact due to the change in the risk appetite and internal capital trigger points, change in level playing field, review of investment strategy, culture and process, and we are of the opinion that the period is too short and ill-timed as a deadline fro companies to meet the expected recapitalisation. A time period of less than one year may not be enough for all matching adjustment, illiquidity premium treatment and capital injection by investors who are mindful of year 2019 as an elective year. Otherwise, many of the organisations will embark on massive staff rationalisation that will further jeopardise the already saturated unemployment market in the country. The embarrassment this will attract in an election year may be unimaginable to the government and its viral effect on the industry,” the union said.

The letter, which was jointly signed by the ASSBIFI National President, Oyinkan Olasanoye and Acting Deputy Secretary General, Yekeen Shittu, appealed a shift to December 2019 as take off date to ensure there are no job losses and prevent collapse of the sector.

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