Reps uncover N640 million paid to unlicensed insurance brokers

 

The House of Representatives ad-hoc committee investigating the return on premiums paid to government officials by insurance companies has uncovered N640 million paid as commission to two unlicensed brokers.

The payment was made by insurance companies that provided services to some Ministries Department and Agencies (MDAs).

The unlicensed brokers are Chrome Insurance  and Standard Insurance Consultant.

Speaking at the resumed hearing of the committee at the weekend, Committee Chairman Hon. Adekunle Akinlade said documents presented to the committee revealed that Guinea Insurance, which provided insurance cover for Nigeria Custom Service, paid a total sum of N250 million as commission to Chrome between 2013 and 2015.

Meanwhile, Staco Insurance, which provided Insurance cover to the Nigeria Ports Authority (NPA) paid a total of N390 million to Standard Insurance as commission for 2014 and 2015.

Akinlade said the large sums are merely a tip of the iceberg in regard to the discoveries the Committe has made from documents submitted it by the insurance companies.

When confronted with the facts, Managing Director of Guinea Insurance Isioma Okokuku admitted that her company erred in doing business with Chrome Insurance, contravening the Insurance Act which bars insurance companies from engaging brokers not licensed by the National Insurance Commission (NAICOM).

She said that her company was moved by desperation to retain the Custom Service account. She however explained that Chrome was engaged by Customs as its brokers, noting that the firm was not paid directly by her company. According to her,  it is the insured who select the broker.

“The truth is that we were aware they were processing their license. This is an industry that is competitive. We needed the business to grow. But we did not appoint Chrome. They were appointed by Customs.  We did not pay them commission directly. The premium was paid to them and they deducted their commission,” Okokuku said.

For his part,  the Managing Director of Staco Insurance, Sakiro Oyefeso, said it was the duty of the regulatory agency to bring to the knowledge of his company the fact that Standard Insurance was not licensed at the time the transaction took place.

Following a barrage of questions by members of the committee, a subdued Oyefeso admitted that his company committed an infraction and pleaded for leniency.

Akinlade said his committee was aware that the use of unlicensed brokers was one of the strategies used by government officials to defraud the government. He thereafter directed the clerk of the committee to summon the Comptroller General of the Custom Service to appear on Wednesday, November 2, to explain why his agency engaged an unlicensed insurance broker in violation of the law.

The Chairman directed insurance companies to furnish the committee with full details of every business  they did with government between 2013 and 2015.