The uneasy calm in the insurance broking professionals’ camp over the propose new capital base may have ignited the meeting of top insurance brokers to map out strategies to confront the new capitalisation for intermediaries.

At a meeting of the Nigerian Council of Registered Insurance Brokers (NCRIB) and top insurance brokers on Tuesday in Lagos at the NCRIB Secretariat, The Guardian gathered, that the discussions centred on appropriate response to the speculation of imminent review of capital base for brokers from the present N5 million to N100 million, an increase of 1,900 per cent, which brokers say is arbitrary.

Although the outcome of deliberation at the meeting was closely guarded, but sources at the meeting said that discussions touched on threats to the broking profession and some of the anti-broking laws being introduced into the insurance law dominated the meeting.

The broker who pleaded anonymity said: “The propose capital base is arbitrary and ill-advised at this moment, considering the fragility of the Nigerian insurance market today. You will recall that at a stage, there were speculations that the capital base for stockbrokers should be increased to N100 million. The initiative failed at a time when activities at the capital market was at its peak, talk less of now advocating such increase in capital base for the insurance brokers.”

According to him, what NAICOM should concentrate is on genuine market development with stronger focus on product development and extensive public awareness campaign, which are part of the cardinal mandates of the Commission.

He said that starting again a fresh battle over re-capitalisation of brokers is ill advised as the issue had been a touchy one, leading remotely in the past to removal of two previous Commissioners of Insurance.

Said he: “Brokers are professionals who only sell insurance services; they do not carry risks. Their jobs are akin to other professionals like architects, lawyers, advertisers etc. Do these ones capitalise?

“Besides, the case for non-compulsion of NCRIB membership is also unacceptable. The present position guarantees professional discipline and adherence to ethics as well as regulation of entry to the profession. Other professional bodies, for example, lawyers, doctors, architects, belong to their professional bodies. Why not brokers. Therefore, any attempt to mishandle the issue would adversely affect the insurance industry and wipe off any little gain that might have been recorded in the insurance post-consolidation.”

The President of the Council, Dr. Teslim Sanusi, who is leading campaign against the new capitalisation, told brokers at the sixth yearly general meeting of the Lagos Area Committee of the council in Lagos to unite to confront this challenge. He recalled that during the review exercise of the 2003 Insurance Act, the views of all stakeholders in the insurance industry were represented to ensure that the law reflected the views and aspirations of brokers, underwriters and loss adjusters.

He expressed displeasure that in the present case, the brokers were not represented, hence the committee recommended an arbitrary capital base of N100 million for insurance brokers specifically meant to eliminate a large number of insurance brokers in the industry.

Sanusi said: “I must use this medium to bring to the fore the discontent of the Council with certain clauses being introduced into the Insurance Act, especially that which could hamper the practice of broking on the long run in the country. Speculations are rife about the move to spiral the capital base of insurance brokers. We have said repeatedly that such move would be counter productive as it would kill professionalism which insurance broking is all about.

“Insurance broking is like any other profession such as law, architecture, advertising etc., which does not require any capital base to operate. Similarly, we have on good authority the move to emasculate the NCRIB by making its membership voluntary. Whilst the Council is resolute to explore all avenues to resist all anti brokers laws, we shall continue to uphold the integrity of our practice through the rendition of quality service to our members.”

He told the brokers: “Let me use this forum to again intimate you that the challenges facing us at this time as insurance broking professionals is quite enormous. We are at a time when our profession is being endangered by multitudes of enemies whom we must combat in order to make progress.”

He said, Charles Revson once said: ‘I don’t meet competition, I crush it.’ We must resolve to crush all competition through co-operation and team spirit.”

However, an insurance technocrat who sits at the drivers seat of the reforms in the industry told The Guardian that the challenges in the business environment has made the present N5 million capital base meaningless as the amount cannot drive the new market initiatives of deepening insurance penetration in Nigeria.

According to him, nearly all the 500 insurance brokers operating in the country are based in Lagos, they are not visible in other parts of the country, moreover their business activities cover less than 10 per cent of the existing opportunities in the market.