Abuja - The Minister of State for Finance, Dr Yerima Ngama, said on Tuesday in Abuja that the National Insurance Commission (NAICOM) would stop receiving budgetary allocation starting 2014.
Ngama stated this at the inauguration of new members of the governing board of the commission.
He said Federal Government started financing the commission’s capital and overhead expenditures when it was set up because there weren’t enough insurance companies in the industry paying levies.
“And from time to time, government supports the commission as its internally-generated revenue grows,” he said.
“But today, the industry has grown and is healthy; we believe that as from next year, NAICOM, just like the Central Bank of Nigeria and NDIC, should be able to generate enough internal revenue to embark on their activities without any budgetary support from the federation account.”
According to Ngama, a strong insurance sector is key to achieving the nation’s vision of being among the top 20 economies of the world by 2020.
“We have to reposition the insurance sector in order to provide the services needed by one of the 20 largest economies in the world.”
“Right now, insurance penetration is very low and we need to make insurance products very attractive because this is a source of capital which we have not tapped,” he said.
The Minister of Finance, Ngozi Okonjo-Iweala, also stressed the importance of the insurance industry to economic development.
“We expect insurance companies to be strong enough to handle the expanding businesses in the economy.”
“We therefore expect the new NAICOM board to produce results, both financial and value added to the economy,” she added.
The chief executive officer of NAICOM, Fola Daniel, said the commission was satisfied with government’s decision to stop funding the commission.
He said, “We are happy to be self-sustained. In NAICOM, we feel we should also be contributing to the national treasury.”
The new chairman, Chibudum Nwuche, said the board would study the industry carefully to ensure growth in the sector.
Members of the board include Kola Ahmed, representing the Chartered Insurance Institute of Nigeria; Kali Zagi, representing the Ministry of Finance and Bashir Zubairu from the House of Representatives.