Wazirin Bauchi Objects Nigeria Police Insurance Company Registration

BY KHALID IDRIS DOYA, Bauchi

A decades-old active player in the Nigerian Insurance Industry, Mohammed Kari has objected to the registration of the Nigeria Police Insurance Company Limited based on what he described as ‘critical concerns’ that he believes deserves serious consideration.

Kari, in an objection letter against the registration of NPF Insurance Company Ltd to the Commissioner for Insurance/CEO National Insurance Commission (NAICOM), said that he has first-hand justification for his objections.

“I refer to your publication and request for objection on the above subject. I am writing to formally object to the registration of the NPF Insurance Company Limited. My objection is based on several critical concerns that I believe warrant serious considerations.”

Mohammed Kari who is a traditional titleholder of Wazirin Bauchi, said, “I was an active player in the Nigerian Insurance industry from 1979 to 2023. In this period, I was the Managing Director/Chief Executive officer of Nigeria Reinsurance Corporation and NICON Insurance Plc. I had the benefit of being an Insurer to the Nigeria Police Force (NPF), a reinsurer to their insurance providers and of course a regulator of the whole industry”.

Mr. Mohammed Kari who was also a consultant in the insurance sector, gave his concerns as, the core operations of the Nigeria Police Force are fundamentally at odds with commercial activities.

He explained that the primary mandate of the Police is to maintain law and order, not to engage in business ventures, hence allowing the Police to operate an insurance company could lead to conflicts of interest and distract from their essential duties.

“The Police is a regulator of sorts, they can not be enforcing the law on compulsory insurance and be a provider of Insurance. The temptation to force motorists to insure with their company will be irresistible”.

“The structure and ownership requirements stipulated by Nigerian insurance laws and Financial Reporting Council necessitate a level of expertise that is currently lacking within the nominated Board of Directors and the Police force”.

“Another requirement is a spread in ownership to avoid undue influence on the company by one shareholder. The authoritative nature of the police and their potential representation on the Board of Directors could lead to undue interference in the management of the insurance company, compromising its independence and effectiveness”.

Kari recalled that the Nigeria Police Force investments have a history of mismanagement, as evidenced by the numerous issues surrounding the Nigeria Police Pension Scheme, raising significant doubts about the ability of the Police to effectively manage an insurance company, which requires a high level of expertise and know-how.

He stated that the fragmentation of the insurance business would result in the loss of valuable data and income for the industry, while entry of the Nigeria Police into the insurance market could disrupt the existing ecosystem, leading to inefficiencies and potential data loss that could harm the overall industry.

“In case they are floating the idea of a captive, I don’t believe the Nigeria Police Force has enough business spread or expertise to support the survival of a captive company neither do they have the reputation to attract independent business. This would expose public funds to unwarranted loss”.

Kari opined that the command-and-control nature of the Police force would make them take offence of a caution by a regulator because, as he puts it, “I don’t see how the Police can operate under someone’s regulation, for they would not accept commercial directive, and neither would they observe regulatory control”.

“When I was an operator and their Insurer, the NPF as a consumer had detained a Head of Department and I, the CEO when we rejected to pay for a loss that was not insured on their policy. Can the CEO of an NPF Insurance Company refused to pay any demand of his owners, whether insured or not? Kari queried.

Mohammed Kari pointed out that approving the application for request of registering the NPF Insurance Company could set a concerning precedent, and may encourage other government agencies, such as the Federal Road Safety Corps, Nigeria Customs Service, Nigerian Army, Navy, Air Force, Nigeria Civil Defence Corps, Office of the Head of Service of the Federation and others, to seek similar licenses.

Kari further observed that proliferation of government-run insurance companies could undermine the integrity and stability of the insurance sector and reverse the government policy of divesting from business, which was the reason for the creation of the Bureau for Public Enterprise (BPE), which opinion needs to be sought in consideration.

The insurance industry active player therefore urged the National Insurance Commission to reject the application for the registration of the Nigeria Police Insurance Company Limited, to maintain the focus of the Police on their primary responsibilities and to ensure that the insurance sector remains managed by entities with the requisite expertise and independence.

The letter of the objection for the registration of the NPF Insurance Company was copied to the Minister of Finance; Chairman, National Insurance Commission; Chairman, Senate Committee on Banking, Insurance and Others Financial Institutions; and Chairman, House Committee on Insurance and Actuarial Matters, also copied to the Director General, Bureau for Public Enterprises (BPE) among others.