The House of Representatives committee’s probe of over 25 insurance firms has unsettled the industry, with stakeholders not only questioning the legitimacy of the probe but also concerned about the impact on the reputation of the industry, which is already dealing with poor public perception. OLUWAKEMI ABIMBOLA writes
Last Monday, the House of Representatives’ Subcommittee on Capital Market and Other Institutions launched an investigation into allegations of non-remittance of revenue payable to the Federal Government by 25 insurance companies operating across the country, most of which are listed on the Nigerian Exchange Limited.
According to the chairman of the committee, Kwamoti Laori, during a meeting with the management of insurance companies at the National Assembly Complex in Abuja, preliminary investigations revealed infractions among the companies related to financial reporting, claims settlement, premium remittance, and policy issuance.
He added that the committee’s investigation was prompted by a formal petition outlining significant violations by the insurance companies, maintaining that the firms were invited to either affirm the allegations or debunk them.
Laori on the probe said, “This committee is saddled with the responsibility of treating a petition based on infractions from these insurance companies in respect of the operations and non-compliance with certain statutory provisions.
“Of course, those infractions have resulted in the Federal Government losing hundreds of billions in revenue from these insurance companies. That is why they are invited, and each of them has been served and given the extent of their liability. We want them to agree or debunk those liabilities. That is the essence of all these things we are doing here to ensure that what is due to the Federal Government comes to it through the operations of these private entities.”
Addressing the moves by the firms to seek legal redress, Laori said it was an attempt to “throw a spanner into the works of the National Assembly,” but stressed that the committee would continue its work and insisted that the CEOs must appear before it to answer questions.
The committee chairman also berated the industry regulator, the National Insurance Commission, saying, “NAICOM is responsible for supervising these firms. I am not speaking for the Commission, but clearly, if they had been more diligent, we might not be here today. It’s time for them to sit up.”
While expressing displeasure over the absence of the chief executive officers of the 25 insurance companies invited by the subcommittee, Laori said that the House would not leave any stone unturned in its quest to complement President Bola Tinubu’s resolve to boost revenue.
“We insist that the CEOs appear in person to answer these allegations. As you’ve seen, some companies sent representatives who were unable to respond to any of the issues raised. That is unacceptable,” Laori said.
However, the Nigerian Insurers Association, in a statement signed by its Director-General, Mrs. Bola Odukale, defended the legal recourse of the accused insurance firms, saying it was taken with legal counsel.
“The Association wishes to state unequivocally that all actions taken by the NIA and the affected member companies in response to the Committee’s invitations and pronouncements were based entirely on legal advice by its solicitors. It was on the firm instruction of legal counsel that recourse was made to the courts. The objective of approaching the court is to seek judicial guidance on the legality, propriety, and constitutional limits of the Committee’s intervention in order to safeguard institutional integrity, uphold regulatory independence, and ensure that legislative oversight remains within the bounds of law.
“The court action seeks to determine whether the current posture of the committee reflects an exercise of legislative judgement, which, by constitutional design, is the exclusive province of statutory regulators, such as the National Insurance Commission, Securities and Exchange Commission, Nigerian Exchange, Financial Reporting Council, Nigeria Data Protection Commission, and the National Information Technology Development Agency. This raises serious questions about legislative overreach and an erosion of the doctrine of separation of powers, a cornerstone of Nigeria’s constitutional democracy.”
NIA added that it remains committed to lawful and constructive engagement with all arms of government, provided that such engagement respects the autonomy of statutory regulators and the boundaries established by the Constitution.
Other stakeholders have also expressed concerns about what they termed to be a media trial of the industry that is trying to regain public trust.
Despite boasting over 200 million in population strength, insurance penetration in Nigeria currently sits below one per cent. Experts have maintained that this low penetration is driven by perception issues: a general mistrust of insurers, a lack of awareness, and the belief that insurance doesn’t pay. Against these concerns, it is believed that the current probe of alleged financial infractions and public accusations would only worsen public perception.
Some industry stakeholders said that the development has economic implications, also citing the fact that the insurance sector is 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 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.
“This is not to suggest that regulatory scrutiny is unwelcome. Far from it. 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, etc. Overlapping and politicised investigations may play well for optics, but they disrupt operations, demoralise professionals, and ultimately slow down the journey toward a more inclusive and trusted insurance ecosystem,” one of the stakeholders said to The PUNCH anonymously.
Also, the fact that most of the accused companies are publicly listed companies has raised questions about fairness and consistency. The argument was that these listed companies already operate under the watchful eyes of regulators, shareholders, and the Nigerian Exchange. Thus, being publicly questioned over financial infractions casts aspersions on the abilities of their regulators and the governance strategies of not just the companies but the sector.
A former President/Chairman of Council, Chartered Insurance Institute of Nigeria, Edwin Igbiti, in an exclusive chat with The PUNCH on Saturday, said it would have been better to let the regulator handle the situation.
He said, “For me, if they have any questions to ask, they know our regulator. They should have directed the petition to our regulator and asked any questions they may have, because the regulator sees the books. As it has been pointed out, this is a distraction to the companies, and the insurance sector itself is trying to gain back the trust and confidence of the public. If they have specific issues with any company, they can ask the regulator, and it will explain.
“How do you summon 25 companies and probe them? That is an indictment of the whole sector. The route that the NIA has taken is the best. Let the law prove their legitimacy. If they had done this to banks, they would not have gotten the confidence (of investors) that they have during this recapitalisation process at the stock exchange. You know, when you say you are probing someone, people have already judged them before knowing what the probe is about. These things affect the economy. What they are doing now is a public show, and it will affect the sector.”
Igbiti expressed support for the NIA and its stance, saying, “I support the NIA in its stand with the industry. It is high time that we came together, strengthened internal good governance, and self-regulation.”
Another industry expert, Ade Adesokan, noted that a critical principle that underpins democratic governance is that legislative oversight must respect constitutional boundaries and institutional mandates.
“While the legislature has an undeniable role in probing matters of national interest, it is imperative that such enquiries do not undermine Nigeria’s rule of law or erode the independence of statutory regulators such as the National Insurance Commission, the Securities and Exchange Commission, and the Financial Reporting Council. The current situation raises serious concerns about potential overreach and sets a worrying precedent for the separation of powers enshrined in our Constitution.
“The Insurance Act 2004, particularly Sections 6, 49, and 86, clearly vests exclusive regulatory, supervisory, and investigative powers in NAICOM. No parliamentary committee, however well-meaning, should circumvent this framework to conduct direct interventions in private-sector regulatory matters,” he said.
He added that the NIA’s decision to seek judicial guidance demonstrates a commitment to lawful redress and institutional accountability, and it must be commended.
“As a nation striving toward transparency and reform, we must reinforce institutions rather than politicise them,” said Adesokan. The insurance industry is already undergoing reforms through the Nigeria Insurance Industry Reform Bill (2024). Adding undue pressure through legislative intrusion risks destabilising a vital economic sector that protects livelihoods and national assets. This is not merely a regulatory issue but a test of Nigeria’s fidelity to democratic norms, legal propriety, and the sanctity of due process. As a public affairs commentator and human rights advocate, I stand firmly in support of a balanced, constitutionally sound engagement between our lawmakers and our regulators. Stakeholders in the Nigerian insurance ecosystem deserve clarity, fairness, and institutional respect.”
Adesokan suggested that there are constructive ways to resolve the situation while strengthening both democratic oversight and regulatory effectiveness.
He said that the legislature can fulfil its oversight mandate while respecting institutional boundaries through collaborative engagement rather than direct intervention.
“Instead of conducting parallel investigations that undermine NAICOM’s authority, the National Assembly should focus on policy-level oversight by reviewing the adequacy of existing regulatory frameworks and ensuring that statutory bodies have sufficient resources and legal backing to execute their mandates effectively.
“The House Committee should engage NAICOM through formal briefings and progress reports on ongoing investigations, allowing the regulator to maintain its independence while keeping lawmakers informed. This approach respects the separation of powers while fulfilling legislative oversight responsibilities. Additionally, the National Assembly can expedite the passage of the Nigeria Insurance Industry Reform Bill (2024) to strengthen the regulatory environment rather than creating uncertainty through ad hoc interventions.
“Simultaneously, the insurance sector must embrace proactive transparency and stakeholder engagement to rebuild public confidence and demonstrate its commitment to best practices. Industry players should strengthen their internal governance mechanisms, enhance compliance systems, and voluntarily adopt international best practices that exceed minimum regulatory requirements. This includes implementing robust risk management frameworks, improving customer complaint resolution mechanisms, and ensuring timely and accurate financial reporting,” he suggested.
Meanwhile, NAICOM has maintained that it plays a crucial role in ensuring the industry’s stability and compliance.
The Commission says it is always committed to addressing industry challenges and strengthening its supervisory framework to protect various stakeholders’ interests and promote a robust insurance market.
