The National Insurance Commission and Chief Executive Officers of Insurance companies have commenced a review of the impact that the new Finance Act would have on the insurance sector.
The Commissioner for Insurance and Chief
Executive Officer of NAICOM, Sunday Thomas while, speaking at a retreat of the National Council of Registered Insurance Brokers Chief Executive Officers, at the weekend, said the move was important, considering the negative impact that previous tax laws have had on the sector.
The theme of the retreat was “X-Raying the Finance Act 2020.”
The NAICOM boss described the theme of the retreat as apt, saying it could not have come at a better time than now when the heat of the COVID-19 pandemic was taking its toll on the financial services sector.
He said the previous tax laws were quite stringent on insurance operators in a manner that permitted double taxation by taxing investment income and policyholders’ funds; and allowed tax losses to be carried forward only for a maximum of four years of assessment, contrary to what was obtainable in other businesses.
He also said the previous tax laws ensured that tax deductible claims and other outgoings were limited to 25 per cent of total premium for general business, in contrast to what was obtainable in other businesses and did not allow a full tax deduction on unexpired risk provision in relation to the financial year.
He expressed optimism that with the level of professional expertise of NCRIB members, they would be able to come up with innovative solutions to tackle the challenges facing the insurance industry.
He also warned registered insurance brokers against engaging in unethical practices.
Thomas described the insurance industry as vital for the development of the economy, adding that while the sector was faced with challenges, particularly that of the Coronavirus pandemic, the lack of adherence to insurance practice was making it difficult for the sector to effectively achieve its objective.
However, he added that the Commission would do all it could, including working with the leadership of the NCRIB, to address the challenges facing the sector.
He said, “Let me task you on business etiquette and ethics in all your professional dealings. Note that the unprofessional conduct of a few amongst you is posing great danger to our collective integrity as an industry.
“Over the years, a lot has been put into improving the fragile image and perception of insurance in this country. It is high time we all rose up to the menace of unethical business behaviour in our sector.”
He added, “As the insurance industry positions itself for the post COVID-19 era, the demand of the insuring public will require sound work ethics for us to optimise performance as intermediaries, business sincerity and customers’ satisfaction must be central to your core business principles.
