The potential deduction of 50% from the revenue of the National Insurance Commission (NAICOM) could jeopardize the effective regulation of the industry, warned insurance expert Dr. Sam Chukwuka Onyeka. Speaking at a press conference in Abuja, Dr. Onyeka emphasized that NAICOM serves as the regulatory body for the insurance industry in Nigeria and is not intended to function as an enterprise or revenue-yielding agency of the federation, as it has been erroneously categorized.
He highlighted that the insurance industry funds NAICOM by paying a statutory supervisory levy. This structure applies to various regulatory bodies in Nigeria funded by the private sector. Dr. Onyeka urged the federal government to consider exempting NAICOM from the automatic 50% deduction from internally generated revenue of government-owned enterprises, as stipulated in Section 62 of the Finance Act 2020, which amended Section 22 of the FRA 2007. He pointed out that the Finance Act allows for exemption through the Minister of Finance and the National Assembly.
Dr. Onyeka proposed that if an exemption is not possible, the deduction policy should be limited to NAICOM’s Operating Fund, sparing the Education Fund and the Security and Development Fund. This, he argued, would ensure a relatively well-supervised and healthy insurance sector in Nigeria. He cautioned that failing to implement these considerations could lead to a new wave of insurer insolvency and the eventual collapse of the sector due to weak and inadequate supervision.
