UPDATED: Insurance Policy Contents Now Reduced For Easy Reading, Understanding –NAICOM Boss

Mr. Olorundare Sunday Thomas, CFI/CEO, NAICOM

*Says Ikoyi Building Collapse A National Tragedy

The Commissioner for Insurance and Chief Executive Officer, National Insurance Commission (NAICOM), Mr. Olorundare Sunday Thomas, recently spoke in an interview with Television Continental (TVC) where he bared his mind on the Ikoyi building collapse, the imperative of timely claim payments and need for awareness among other industry issues.  The Revealer who monitored the interview provides the excerpts:

What is the insurance law saying about buildings of this magnitude (21 storeys, that’s huge)?

Well, on behalf of the entire insurance industry, we commiserate with those who lost their loved ones in the Ikoyi Building collapse. This is a national tragedy – 21 storey building is not a small building. And of course the law knew that things like this could happen and there are things that we follow – the occurrence of incidence of this nature.

Of course, insurance policy of Insurance Act 2003 made provision for building under construction and this rightly fall under Building under Construction and such building and the liability that could arise as a result of an incidence of this nature have been provided for in the law.  So, the first thing is to actually confirm whether there is a compliance with that provision of the law, and if there is compliance, we want to find out which insurance company provided the cover, then we begin to follow up as to how they can at least alleviate the suffering of the relations of those who must have lost their loved ones.

In Nigeria how exactly do people insure their properties?

In think is the case of awareness, and I will say that people will think that it can’t happen even though we see it happened every time. So we need to do more in creating that needed awareness to make people realize, first those that are mandatory because this is one of the mandatory classes of business so it’s not optional – Buildings under Construction, Public Buildings, all must be insured and it’s because of the liability that could arise as a result of the incidence of this nature.

You can imagine those that have been recovered dead, they have relations that they are providing for, and what are the financial consequences of this occurrence?  It does not end here – children may be out of school, the family may be out of the house because of the inability to pay rent because the breadwinner is gone.

These are some of the liabilities that have been foreseen in that provision.  Then if there is no insurance cover, it will be difficult, and am not even talking about the building and other liabilities that could arise. I was made to understand that people have subscribed to the building and what becomes of it?

So what you are saying is that it is one thing for people to insure their properties and another thing for insurance companies to actually pay when it’s time for them to take action. How frequently do your members pay indemnity to those that insure their properties with them?

Actually, claim payment is a responsibility. The moment you take the cover, it’s now your responsibility if it happens, you pay and if there is a delay in the payment, there are distress mechanisms and one of the distress mechanisms is that Nigerian Insurers Association has a Complaint Bureau, then the National Insurance Commission (NAICOM), statutorily have the responsibility to address every complaint that arises as a result of claims – either delay or not payment of claims.

I’m disturbed that an individual has to go through so hassle because that’s what it seems to be like especially in this clime, it is easy for an individual to pay the premium but when claims come, the insurance company either delay or refuse to pay. What is your take on this?

I want to believe that it is more of a perception relying on what must have happened in the past, but I can tell you that things have changed; over time things have changed; you don’t have those kinds of things anymore. Yes we know we have legacy issues in the past, but those ones have been addressed and the chances are that when you insure, there are chances of getting something than when you don’t insure at all.

With what has happened now, who takes the responsibility of paying victims’ families that is one, and two how do developers get some compensation considering the building was actually closed?

You know it’s amazing. Lagos State is an insurance friendly state, I make bold to say this. Lagos State has developed an insurance culture.  I think the next step in Lagos state is for them to begin to compel and assist in enforcing the citizens to take insurance cover because is going to bounce back on the state. Now if I tell you what Lagos State is incurring by way of expenses in all these occurrences, these are some expenses that could possibly have been recovered from the insurance industry if they were insured, but without insurance, the state would have to take responsibility.

That takes us back to the first question that what needs to be done should be done properly. How do we move beyond this point?

I think we need to sensitize the people. We need to let the people know, first the relevant agencies of government including Town Planners, Building Contractors and Developers, Quantity Surveyors amongst others. We need to do our job first and foremost and then when it happens, there must be compensation.

Maybe Insurance Brokers should take their time to diligently explain to the person being insured what it entails and not when something happens they begin to ask for a document that was never spoken about at the beginning.

You know, I have heard this before. When you go for dry cleaning, do you bother to read the information on that small note that is given to you? I think we all need to develop a reading culture. Insurance policy now is very small in nature now in terms of the size so that people could read easily but how many people take time to read, to know their rights and obligations under the cover. I think this is something people need to develop.