The National Insurance Commission has revealed that about $2bn leaves the shores of Nigeria in capital flight as multinationals provide health insurance for their employees.
This was disclosed by the Deputy Commissioner for Insurance (Finance and Administration), Ekerete Gam-Ikon, during a panel discussion at the Insurance Meets Tech 4.0 Conference held in Lagos.
According to Investopedia, health insurance is a contract between a company and a consumer. The company agrees to pay all or some of the insured person’s healthcare costs in return for payment of a monthly premium. The contract is usually a one-year agreement, during which the insurer is responsible for paying specific expenses related to illness, injury, pregnancy, or preventative care.
Gam-Ikon said, “You’ve got a lot of multinationals who are giving their employees health insurance, right? We then discovered that in a year about $2bn goes into that from Nigeria.
They are doing the insurance with international insurance providers. That’s how much spending goes out of Nigeria for health insurance. What the act has provided for is to have those entities pay a percentage of that to the Nigerian government.
“In terms of health insurance, it still remains the domain of the traditional insurance companies.”
Section 204 of the Nigerian Insurance Industry Reform Act placed health insurance under domestic insurance or reinsurance business, for which local capacity must be fully utilised before they are insured or reinsured abroad.
Subsection 7 of the Act specifically said, “Notwithstanding the provisions of any other law, a foreign or international health insurance provider shall obtain the prior approval of the Commission before transacting any health insurance-related business that emanates from Nigeria, and any person who contravenes the provisions of this subsection shall be liable to a penalty of a sum not less than the total premium involved.”
The NAICOM Deputy Commissioner also revealed that the regulator was having discussions around insurance for voters, as he pointed out that the Independent National Electoral Commission has insurance for its people and equipment during elections, but voters are not covered.
“INEC ensured all their staff members, including ad hoc staff, have insurance. It is only voters who go out without insurance,” he said, indicating that the Commission was open to collaborating with other agencies and stakeholders to expand insurance penetration.
The President of the Chartered Insurance Institute of Nigeria, Mrs. Yetunde Ilori, in her comments, said that the new law, which stipulates higher capital, may motivate insurance firms to take a closer look at the sector.
“A number of HMOs do not directly come from the insurance, meaning they are under NHIA; however, you know insurance companies own HMOs as subsidiaries, and I think also it’s an area that you want to deploy your capital.
“I know the agitation from the regulator about why we are not doing health insurance. I used to work for a company that did health insurance, and honestly, the moral hazard was something that got them packing, but with the evolution of technology and so many other things that have now come to be in place, I think it’s an area that insurance companies will want to take a close look at and think of the protection that you have for consumers.
“Sometimes you want to look at yourself and ask, ‘Am I a one-stop shop? Am I just protecting their property, their lives? Why not their health, not in the HMO type, but in actually providing the insurance? I’m looking at a time when even the HMO will become a co-pay system, whereby you don’t have an alternative but to buy insurance to support it.”
