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February 22, 2024
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Insurance NGO urges FG to exempt NAICOM from IGR deduction

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By Ginika Okoye

The Transparent Protection Ltd/GTE (TPL) has urged the Federal Government to exempt the National Insurance Commission (NAICOM) from the 50 per cent automatic deduction from the Internally Generated Revenue (IGR) of government organisations.

The News Agency of Nigeria (NAN) reports that TPL/Gte is a pioneer membership-based, insurance sector-specific Non-Governmental Organisation (NGO).

Dr Sam Onyeka, the Lead Director of the NGO, said this at a news conference in Abuja.

Onyeka spoke against the backdrop of the recent circular by the Minister of Finance regarding the 50 per cent automatic deduction from the IGR of the Federal Government-owned enterprises

He said the country must brace up for a new wave of insurer insolvency and eventual collapse of the sector for weak and inadequate supervision if the policy persisted.

Onyeka said the exemption of NAICOM was necessary as the Commission was not engaging in commercial enterprise, adding that NAICOM’s objectives would be frustrated if the requisite funds were taken away from them.

He recommended that in the case where exemption could not be obtained, the policy should be limited to NAICOM’s operating fund while education and security and development fund be spared.

According to him, NAICOM is funded by the insurance industry through payment of statutory supervisory levy and the supervisory levy constitutes more than 85 per cent of its total revenue.

The lead director said that other insignificant sources of revenue for NAICOM included fines, and tender’s fees.

“The summary of our position is to fault the Federal Government on the policy as it affects NAICOM.

“We are blaming NAICOM to have stood by and watched, after they had the opportunity to make a case for their exemption from the policy.

“We are recommending joint industry engagement at this time. If NAICOM cannot be fully exempted from the policy, then let the deduction be applied to its operating fund only.

“Under the provision of Part 5 of the NAICOM Act 1997, every insurance institution (as defined) is required to contribute a minimum of one per cent of its gross revenue as supervisory levy.

“The supervisory levy constitutes more than 85 per cent of NAICOM’s total revenue. Other insignificant sources of revenue for NAICOM include fines, and tender’s fees.

“Section 17 of NAICOM Act established four different funds for the Commission namely, operating fund, education fund, security and development fund and reserve fund.

“Under Section 18 of the Act, the operating fund takes care of the day-to-day running of the affairs of the Commission and includes staff salaries and board remuneration,’’ he said.

The objectives of TPL include protection of the collective interest of its members, who are primarily insurance policyholders, and to hold both the insurance institutions and the regulator accountable. (NAN)(www.nannews.ng)

Edited by Chinyere Joel-Nwokeoma

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