Industrialist seeks flexible regulation of pension, insurance sectors
Foremost industrialist and a former Chairman, AIICO Insurance Plc, Chief Dele Fajemirokun, has called on regulators of insurance and pension sectors to tone down on the guidelines meant to supervise the sectors.
Speaking in Lagos at the 2nd National Conference on Insurance and Pension organised by the National Association of Insurance and Pension Correspondents, (NAIPCO), he said for insurance and pension industries to move forward, there was need for bureaucracy to be eliminated and reduction in rules, which favours opportunities to generate funds.
According to him, “there is need to avoid complexity in regulation with a focus on judgement-led regulation instead of rules-based regulation. Regulators should seek to attract the best talents exemplified by the Bank of England and United State FED, where they recruit the best talents from industry and academia; in some cases, a foreigner such as the Bank of England governor.”
Fajemirokun said over the years, the political desire to regulate an industry tended to ebb and flow in response to the opposing pressures of public disquiet about the industry problems and the industry’s concerns over-interference in the way it carries out its activities.
He said: “The regulated firms in insurance and pensions say they do not object in principle to being regulated, but there are frequent and vociferous complaints from them, and indeed from the public, about how regulation is being applied in practice, either it is too strict or not strict enough depending on their perspective.”
At any given moment, Fajemirokun said the basic question that should be asked is how effective is regulation in achieving its purpose, which is creating and maintaining the effective and efficient insurance and pension market.
He further said there should be joint thinking, transparency, fairness, while addressing issues like bureaucracy, pull me down syndrome prevalent in the third world, complexity, over prescriptive leading to compliance fatigue and cost of compliance.
He, however, commended the National Pension Commission (PenCom) and National Insurance Commission (NAICOM) for working together over the years especially in developing joint guidelines on annuity for the insurance industry.
He urged them to keep working together to ensure that both industries grow, and that their vulnerable customers are treated fairly as they exercise their right sto choose the retirement solution that meets their needs.
The industrialist advised that the insurance and pension industries needed to keep investing in capacity building initiatives especially in support of actuary students, adding that both industries, together, must accept the burden of responsibility for drawing attention to care for the elderly in our midst.
“There should be a government actuary’s department that will support effective decision-making and robust reporting, providing the necessary advice to government on policies to assist both industries.
“This is a call to the policymakers to recognise that growing old makes one an endangered species in this country and therefore laws should be passed to protect the aged.
Also speaking on National Health Insurance Scheme (NHIS), he advised that the scheme should be retooled to recognise the elderly need and make available specialist skills to address the health needs that come with growing old.