The National Insurance Commission (NAICOM), plans to inaugurate a pool for insurance of federal government assets.
The Commissioner for Insurance, Alhaji Mohammed Kari, who disclosed this in a brief interview with THISDAY recently in Abuja, said the proposed pool, when fully in operation, would give insurance firms who met the requirements equal chance of participating in the insurance of public assets.
He also said it will address the present practice of local insurers wanting to reinsure their big ticket businesses abroad instead of insuring such businesses in Nigeria.
According to Kari, the pool would cover insurance of big assets of federal government such as aviation and big structures of government like Federal Secretariat building.
He however, said NAICOM is yet to come up with guidelines and requirements for participation in the pool.
Meanwhile, insurance industry operators said the idea of forming public Asset Insurance Pool is the best thing that has happened to the industry.
Operators, who spoke to THISDAY on this, said it will bring to a stop the long standing unhealthy competition and all the professional malpractices associated with Public Asset Insurance underwriting.
According to the Managing Director, Niger Insurance Plc, Mr Kolapo Adedeji, it is good for the industry and will ensure that operators who qualify for the business get their desired market share.
He also said it will enable each underwriter find his own level in the business.
Over the years, participation in the public sector asset insurance has been a major source of unhealthy competition and unprofessional practices in the country.
Insurance managers, year in year out, race to participate in the business at all cost.
This has seen many going against their professional will by involving themselves in professional vices such as rate cutting, bribing of government insurance agents as well as buying of premium from government officials to the extent that some of them, in their bid to corner such government accounts, give rates that they know will not enable them pay claims from such businesses when they arise.
The result of this is that such insurers, agree with government officials to ignore the claims when they occur, a situation which has left many damaged government assets such as burnt public buildings un repaired because insurance firms that insured them absconded as the risk crystalises.
This was the case until few years back, when the immediate past commissioner for insurance, Mr. Fola Daniel, issued a warning that the era of abandoned claims from damaged public assets was over therefore any insurance firm bidding for insurance of government assets should be ready to pay for claims emanating from such assets irrespective of how much premium he charged.
Daniel, warned against quoting unprofessional rates insisting that the commission would no longer close its eyes against such insurers.
Some insurers, on account of this, lost interest in government business while others, bearing in mind that government has remained the biggest spender in the economy, continued in the race but insisted on charging professional rates.
Perhaps, the bid to put an end to the negative practices of operators in government asset insurance and the need to ensure that the much desired government business insurance spreads equitably to interested and qualified insurers, propelled the present commissioner for insurance to come up with the idea of the proposed pool.