House of Representatives
Reps’ probe: How not to disrupt Nigeria’s insurance sector reforms
[By VICTOR NZE]
Planned move to prove about 25 operators in the country’s insurance sector by the Federal House of Representatives through its Sub-Committee on Capital Market and Institutions, has continued to unsettle the market as industry stakeholders express the worry over what they described as ‘politicization and unfair’ modus operandi adopted by the lawmakers in their controversial investigations.
This is also as the private sector operators say the investigations now threatens to put their businesses at risk of downward spiralling public perception in an already challenged market, positing that the industry is well regulated and replete with competent regulatory bodies established by the Federal Government to address such matters as raised by the House Committee, which it fears may be ill-equipped for the task.
It would be recalled that the
Chairman, House Sub-Committee on Capital Market and Institutions, Hon. Kwamoti Laori, had confirmed, last Tuesday,July 22, the readiness of the National Assembly to prove the defaulting insurance firms over what he claimed to be their roles in alleged revenue leakages suffered by the Federal Government from financial infractions committee by the accused operators.
The Hon. Laori who represents Demsa/Numan/Lamurde Federal Constituency, Adamawa State, stated this during a meeting with the management of the insurance companies at the National Assembly Complex in Abuja.
According to the lawmaker, the House Subcommittee is working on a petition based on infractions from these insurance companies in respect of their operations and non compliance with certain statutory provisions, which he alleged had cost the government billions of naira in revenue losses.
Meanwhile, the insurance firms under the aegis of their umbrella body, the Nigerian Insurers Association (NIA), have already approached the law court seeking interpretations and to determine whether the current posture of the House Committee reflects an exercise of legislative judgment, which, by constitutional design, is the exclusive province of statutory regulators, such as the National Insurance Commission (NAICOM), Securities and Exchange Commission (SEC), Nigerian Exchange (NGX), Financial Reporting Council (FRC), Nigeria Data Protection Commission (NDPC), and the National Information Technology Development Agency (NITDA).
This, they posit raises serious questions about legislative overreach and an erosion of the doctrine of separation of powers, as founded in the country’s constitution.
However, industry operators who have labelled the reaction by the NIA as both a defense and a cry for fairness, have equally drawn attention to what they describe as a deeper issue at stake; that of public trust in the insurance industry, which they fear is already fragile and underdeveloped.
Nigeria’s insurance penetration currently sits below 1 per cent alarmingly low for a country of over 200 million people. It is an industry that has long struggled with perception issues: a general mistrust of insurers, lack of awareness, and the age-old belief that insurance does not pay. Against this backdrop, therefore, the current allegations of alleged financial infractions, public accusations, as well as the attendant narrative of an increasingly politicized oversight process only serve to worsen public sentiment.
For a sector still fighting desperately to win back the trust of Nigerians through awareness campaigns, digital innovations, regulatory reforms, and heavy investments in public education, this sort of controversy is a step backward. Regardless of the merit of the investigation, the optics alone are damaging. Public perception does not wait for judicial resolution or regulatory clarification; it instant reacts to newspaper headlines, soundbites, and insinuations.
The insurance sector remains a critical enabler of economic growth, providing risk protection for businesses, individuals, and institutions. A thriving insurance industry means resilience for small businesses, deeper financial inclusion, and confidence for investors.
When, therefore, an entire industry is publicly questioned, without clear, transparent, and evidence-based communication, the ripple effects are far-reaching – undermining investor confidence, discouraging policyholders, and weakening an already small market.
Moreover, the NIA’s point about publicly listed companies being singled out, while unlisted entities are not held to the same scrutiny, raises legitimate questions about fairness and consistency. These listed companies already operate under the watchful eyes of regulators, shareholders, and the Nigerian Exchange. Dragging them into public controversies based on consultant reports not shared transparently could send a troubling signal; that openness and compliance are liabilities in Nigeria, not strengths.
This is not to suggest that regulatory scrutiny is unwelcome. But oversight must be fair, well-informed, and constructive. The insurance sector must be regulated by those equipped to understand its complexities – namely, the statutory bodies like NAICOM, SEC, FRC, and others. Overlapping and politicised investigations may play well for optics, but they disrupt operations, demoralize professionals, and ultimately slow down the journey toward a more inclusive and trusted insurance ecosystem.
Nigeria has set its sights on becoming a $1 trillion economy by 2030, and insurance is one of the levers to get there. Now is the time to rally support for the industry, not stoke distrust around it.
