FINANCE

Insurance companies will eventually pay about N20 billion in compensations to losses recorded at the October 2020 #EndSARS protests.  

Chairman of the Nigeria Insurance Association (NIA), Mr Ganiyu Musa, said on Wednesday in Lagos that the companies had paid claims totalling N9 billion already.  

NIA said in a report issued on Monday that the insurance companies settled claims on 718 cases of vandalism, 93 cases of looting, 113 cases of theft, and 136 cases of loss of cash.  

The report also stated that 99 claims were settled on malicious damage; eight on business interruptions, 455 on burglary and 912 cases were settled on fire and burnt sites in the aftermath of the #EndSARS protest.  

“Insurance companies have paid more than N9 billion so far as at the last count, but this is certainly not all as we still have quite a lot of claims that are going through processes of documentation.  

“These claims are yet to be settled because the claimants have not provided sufficient documentation to support their claims,’’ Musa said.  

He stressed that by the time claimants submit all the necessary documentation, the industry would be settling claims of about N20 billion.  

Musa, managing director of one of the insurance companies, said estimated economic loss to the protest was more than N200 billion but not all the losses were insured.  

He stated that all insurance companies in the NIA had risen to the challenge to settle all valid claims and assured that all outstanding valid claims of the #EndSARS protests would be paid.  

The NIA chairman noted that the #EndSARS incident was an eye opener to all Nigerians that bad things happen to good people and the unexpected happens once in a while; hence the need for insurance.  

“Nobody ever thought that something like the #EndSARS protest would happen and resulting in so much economic damage.  

“The losses were unexpected, but that is the reason why insurance exists.  

“Those who had valid insurance cover on their property will now understand the value of insurance as an instrument to restore you in case the unexpected happens,’’ Musa stressed.  

According to him, if all the lives and properties damaged were insured, the insurance companies would have been able to pay all the claims.  

Musa explained that this would have been so, because premiums would have been paid and the insurance companies would have accumulated sufficient reserve funds over time to be able to pay the claims.  

The NIA scribe charged governments at all levels to ensure that all their assets, physical and human, are properly covered by relevant insurances.  

Musa urged government to also provide an enabling environment for insurance business to thrive.  

The Nigeria Deposit Insurance Corporation (NDIC) says the payment of premium by financial institutions insured by the Corporation will now be based on risks’ assessed.  

The Managing Director of the Corporation, Mr Bello Hassan, disclosed this at the 2021 Financial Correspondents Association of Nigeria (FICAN) workshop on Wednesday in Ibadan.  

Hassan noted that the Corporation was currently reviewing the premium approach to ensure that the probability of risks crystallising in any NDIC insured financial institution would be the major determining factor for the pricing methodology.  

According to him, the focus is therefore to scale up the deposit insurance framework; provide timely support to insured institutions as and when required.  

The managing director said the strategy would also ensure faster and orderly resolutions of liquidated insured institutions and continue to assist the CBN in promoting the stability of the banking system.  

”In the area of deposit insurance, as a key mandate of the Corporation, we have evolved a strategy which accentuates our existing framework.  

”The initiative, strives to ensure that insurance cover is adequate.  

”We have commenced the review of our approach to the determination of premium by banks to make it more risk-based, such that, the probability of risk crystallising, becomes a major factor in the pricing methodology of our premium going forward,” Bello explained.  

He said the Corporation had identified the need to reconsider its framework, to provide realistic terms and conditions that would enable qualifying insured financial institution promptly access technical and or financial support in line with NDIC’s Act.  

Bello listed some obstacles bedeviling the efficient and timely resolutions of liquidated institutions to include slow recovery and realisation of assets, as well as litigation by erstwhile shareholders and creditors of closed banks.  

The managing director said the obstacles would only be addressed through effective collaborations.  

He expressed optimism that the workshop would help the media, the civil society groups, along with the insured financial institutions to better understand the policies and programmes of the Corporation.  

In a lecture, Mr Olatayo Babatolu, the Director, Banking Examination Department of the NDIC, said the banking industry was the most disrupted today following developing trends.  

He said that one of the ways to ensure resilience in the industry was to have a Deposit Insurance Scheme (DIS).  

Babatolu said that DIS was a financial guarantee to protect depositors in the event of bank failure.  

The director said that the Corporation would continue to leverage technology to ensure speed in payment of insured deposits and consumer complaints resolution.

Anthony Areh

The Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, says revenue distributed at Federation Account Allocation Committee (FAAC) is generated by Federal Government agencies.

The minister fielded questions from State House correspondents after the Federal Executive Council (FEC) meeting presided over by Vice President Yemi Osinbajo on Wednesday at the Presidential Villa, Abuja.

She faulted recent allegations by Gov. Godwin Obaseki of Edo that Central Bank of Nigeria (CBN) printed N60 billion in March to support federal allocation to states.

The governor was also reported to have said that the economy was in dire condition due to huge debt burden.

“The issue that has been raised by the Edo State Governor for me is very, very sad because it is not a fact.

“What we distribute at FAAC is revenue that is generated and the FAAC revenue distribution is public information and we publish it.

“ So, it is the revenue generated by the FIRS, the Nigeria Customs Service (NCS) and the NNPC that we distribute at FAAC. So, it is not true that we printed money to distribute at FAAC.’’

On borrowing, Ahmed said that Nigerian debt was within sustainable limits.

According to her, what is needed is to improve the nation’s revenue to enhance its capacity to service not only our debt obligation but also to service the needs of running government on a day to day basis.

“So, our debt currently at 23 per cent to Gross Domestic Product (GDP) is at a very sustainable level.

“ You can look at the reports that you see from multilateral agencies; those facts are stated.’’

The minister said that her ministry presented a memo to FEC on behalf of the FIRS.

She said that the memo sought council’s approval for award of contract for the construction of the FIRS building at Ilupeju Medium and Small Tax Payers Office in the sum of N539 million inclusive of 7.5 per cent VAT.

Ahmed said the completion period of the project was 52 weeks.

“The Ministry also presented on behalf of NCS a memo that was seeking for the council’s approval for the design, construction and supply of two NC 36 M Monohull patrol boats in the sum of N5.06 billion inclusive of five per cent VAT with a delivery period of 12 months.

“We also presented a memo again on behalf of the NCS for the approval of Council for the design, construction and supply of seven fast assault boats and seven regular patrol boats at the sum of N501 million inclusive  of 7.5 per cent VAT with a delivery period of eight weeks.

“ The purpose of purchase of these two types of patrol boats is to enhance the efficiency and effectiveness of operations of the NCS in its bid to control smuggling and also ensure enhance efficiency of Customs duty operations in the marine unit of the NCS.

“We also presented again on behalf of the NCS a request for council’s approval and council approved the procurement of 427 operational vehicles for the NCS operations in favour of various contractors in the combined sum of N14.55 billion inclusive of 7.5 per cent VAT with a delivery period of four weeks,’’ she said.

She said there were several contractors, including Wada Motors, Elizade Motors, Westwood Motors and Globe Motors, providing different category of vehicles that are meant for field operations of the NCS.