Non Remittance of Premium to Insurers: Brokers Shift Blame to Govt.

As the battle to reposition insurance continues, with the attendant growing positive image, insurance brokers’ have laid the blame of outstanding non remittance of premiums on the doorsteps of the government. While brokers have been repeatedly blamed by insurers for withholding their premiums even after they have collected from clients, the brokers themselves have broken their silence by returning the accusation baton to both the states and federal government. According to the Mr. Bola Tinubu, managing director of SCIB Insurance brokers, government constitutes a major set back to the growth of the insurance industry by virtue of the huge outstanding premium which it owed the industry. He asserted that rather than blaming brokers, the government should take the blame, stressing that both states and federal government are withholding over 80 per cent of the total outstanding industry premium. He blamed the National Insurance Commission (NAICOM), itself a government body, for not making government to see the urgent needs for these outstanding premiums to be paid. According to the brokers, government has owed the industry the highest outstanding premium over a long time and this has had a huge toll on the growth of the industry. Tinubu who spoke on behalf of the brokers at the 2010 brokers’ forum organized by the Industrial and General insurance plc (IGI), explained that contrary to widely held belief that it was the brokers that held the industry down through non- remittance of premium and for most of the unethical practices going on in the industry, stated that government was the real culprit. While exonerating brokers from these areas of accusation, he identified the major issues under focus as rates cutting, overriding commission, non remittance of premium among others, stating that brokers do not indulge in these malpractices as widely believed in industry circles. Clarifying brokers’ position further, the SCIB boss explained that what insurers have termed rates cutting is actually a bargain to bring down the prices due in line with the desire of clients who prefers the cheapest quotes. He opined that this was rather in order, because as wholesale buyers of insurance whom the insuring public sees as technical experts who are out to get the best bargain for them. According to him, while brokers are accused of rate cutting they do not actually cut the rate rather what they do is as whole sale buyers of insurance is to try to bit down the price to get the cheapest price for their clients who approach them to buy the policy for them as insurance technical experts, He countered that if this is what the underwriters call rate cutting, then they are making a mistake. This he hinged on the fact that the interest of their clients has to be protected as in every other business. Most brokers have also blamed NAICOM for not pushing for the compulsory provision of premium in the annual budget of government and their subsidiaries. Experts opinion however hold that some insurance companies unduly blame brokers and other agencies whereas the bulk of the blame should go to some them who are technically deficient.