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APRIL 2, 2007 VOL. 20. NO 25

Caught in the Web

**Nuhu Ribadu**

Finally, the excesses of Emmanuel Chukwulozie, Commissioner for Insurance (CFI), and boss of the National Insurance Commission (NAICOM), comes to the fore as he is suspended by President Olusegun Obasanjo over alleged malpractices
By George Umunnakwe
Just like the way his predecessor, Oladipo Bailey, was shown the way out of the insurance sector in 2004, Emmanuel Chukwulozie, the Commissioner for Insurance (CFI) and boss of the National Insurance Commission, (NAICOM), may bid the sector a final goodbye as he was on Monday, March 19, 2007 placed on an indefinite suspension.
Bailey had in 2004 soiled his hands in a multi-million naira Vehicle Insurance Sticker contract, otherwise called VISER. This drew the ire of stakeholders and indeed the committee set up by the then Minister of Finance, Dr. (Mrs.) Ngozi Okonojo-Iweala who had wasted no time in carrying out the recommendations of the seven-man committee that unravelled the scam.
Addressing a stunned audience in Abuja, Okonjo-Iweala had said that never in her wildest dream would she believe that a fine technocrat like the CFI could stoop so low to get his hands soiled in a messy contract deal.
Interestingly, last week’s suspension of Chukwulozie may not be unconnected to the dust which the last lap of the recently-concluded recapitalisation process in the sector threw up. Top on the file was the allegation that some perceived cronies of the CFI were unduly favoured to scale the hurdle. This, evidently, was to the detriment of some smaller companies. And with one voice, they alleged that the process was compromised.
The NAICOM boss, The Source gathered, had earlier written and sought approval for the autonomy of the insurance supervisory agency. While this was on-going, Chukwulozie requested from the presidency about N1.7 billion as support for the post-consolidation era.
Ironically, all these were to embarrass the Minister of Finance, Mrs Nenadi Esther Usman, whose ministry oversees the activities of the insurance supervistory agency. “You see this man (Chukwulozie) is fond of taking laws into his hands. He unilaterally takes decision by himself, without consulting his fellow directors or the board. At times, most of what we know about the commission and indeed the insurance sector, we learn from the pages of the newspapers. My brother, this is not how things work in the civil service. There are procedures which must be followed or it follows you out,” a very reliable source in the ministry said.
Chukwulozie had earlier in the month solicited for the approval of about N1.7 billion to enable the commission carry out its duties in the post-consolidation era. This, however, was without the knowledge of Usman who felt slighted by the way the CFI requested the money without passing through beaurocratic processes as required in the civil service.
The presidency had in the last quarter of 2006 released about N500 million for the commission to use for the pre-consolidation of the sector. This, sadly, did not get to NAICOM until February 2007, 11 months after it was released. Irked by the late release of the money by the finance ministry, Chukwulozie according to The Source’s findings went cap in hand to whoever would agree to loan the commission money to enable it execute the recapitalisation process.
The Source further gathered that this made the CFI venerable to manipulators in the sector who capitalised on the lapses to loan the commission money. This of course, was not without bending some rules as orchestrated by the big lenders in the sector who according to findings were using it to “wet grounds” in order to scale the recapitalisation hurdle.
“Why wouldn’t we bypass the finance ministry in many things that we do. We went to them for assistance and they declined. Even the money that was released 11 months ago by President Olusegun Obasanjo only got to us barely three weeks ago– that is days to the end of the consolidation exercise,” a top management staff of NAICOM who declined for his names to be mentioned, stated.
Meanwhile, counting on the alleged sins of the CFI, The Source gathered that the manner the alleged autonomy of the commission was gotten left much to be desired. By the autonomy, the commission reports directly to President Obasanjo. It also repealed all bureaucratic processes of being funded and getting funds. The commission before the autonomy waited annually for government grant and the one per cent levy from all insurance companies in the sector.
However, ministry sources aver that the Chukwulozie-led commission never carried the supervising ministry along on its way to getting the much needed antonomy. This led to a protest from the minister of finance to the presidency and subsequent invitation of the top management staff of the commission to explain how they got their autonomy without the knowledge, backing or contributions of the supervising ministry.
Incidentally while the horse trading was going on, the ministry initiated enquries into how the recapitalisation process was conducted and concluded. It also x-rayed the activities of the CFI right from the day Chukwulozie assumed office in 2004.
Notably, what it unearthed shocked even the directors who had been working for almost 30 months now with Chukwulozie. Notedly, while the directors were hurriedly summoned to the office of the minister of finance on Friday, March 16, 2007, their CFI was in far away India.
Present at the urgent meeting were the Deputy CFI (Finance, Sunday Thomas and Abimbola Ogungbe (Administration). When equiries were made regarding the whereabout of the Deputy CFI (Technical), Bala Hussaini, what the minister got apparently shocked her to the bones.
Following leadership differences between the NAICOM boss and his deputy in charge of technical, Hussaini was transferred to NICON Insurance Plc as head, Branch Development and Information. This position, industry watchers say, is too low for Hussaini’s status as a former Deputy Commissioner for Insurance.
This further irked the minister who told those at the meeting that apart from allegedly collecting some amount of money from the boss of NICON Insurance, Jimoh Ibrahim, Equity Assurance Company Limited and Custodian and Allied Insurance Company Limited also, allegedly, gave the CFI some money in order to be recertified.
Days before the expiry date of the recapitalisation process, the CFI at an elaborate ceremony handed a certificate to NICON Insurance. Days later, some other highly favoured insurance companies were announced as having crossed the hurdle. This raised ample dust in the sector as the commission was criticised over the manner he handled the last lap of the process.
Earlier, Chukwulozie had in the first quarter of 2006 invited the Economic and Financial Crimes Commission (EFCC) to arrest management staffers of some insurance companies. This, according to him, are those connected to the controversial Viser, sticker scam. Chukwulozie was at the time queried by Usman who questioned the rationale behind the invitation. According to the minister, Chukwulozie did not follow administrative procedure in inviting the Ribadu Nuhu-led commission.
Meanwhile, defending the separate role they played in the just- concluded recapitalisation process, Chairman of the Nigerian Insurers Association (NIA) and Chief Executive Officer, Equity Assurance Company Limited, Ibidolapo Balogun, said he and his counterpart at Custodian and Allied Insurance Company Limited did not do what was not agreed upon by the members of NIA. The body and the commission had been having a brawl over certification fee which NAICOM insisted the insurers must pay. This led to litigation as an Abuja Court of Appeal restrained the commission from demanding the fee from insurance companies operating in the country.
Also, the minister’s grouse according to a source in the ministry had to do with a one-day seminar organised by the commission in London in October 2006, as against the proposal for road shows proposed by stakeholders in the industry.
The Nigerian Council of Registered Insurance Brokers (NCRIB) and NIA had tabled a proposal to the commission to organise road shows in Port Harcourt, Kano, Abuja and Lagos in the interest of companies that were in dire need of funds to raise their capital base to the new minimum requirement, but the supervisory body turned down the proposal, opting rather for a one-day seminar in London, which gulped millions of dollars.
The seminar was put together by Business in Africa in collaboration with NAICOM and two other local newspapers. Entitled “Insurance Reforms in Nigeria Conference: Consolidation, Innovation, Diversification and Modernisation”, the event was held at Dorchester Hotel, London. The participation fee fixed by the Commission was N150,000. This, of course, is apart from transportation, accommodation and feeding.
Most insurance companies frowned at this, as they reasoned that coughing out such money will tell drastically on their recapitalisation drive.
Interestingly, not being able to stomach the excesses of the CFI, the Minister of Finance on Monday, March 19, 2007 announced the suspension of Chukwulozie. In his place, Hussaini who was earlier banished to NICON Insurance Plc was named as acting head of the agency.
A terse press statement from the Ministry and signed by the Chief Press Secretary, Abdul Ganiyu Aminu, on behalf of the Minister of Finance, said, “the president, Olusegun Obasanjo has ordered the immediate suspension from office of Emmanuel Chukwulozie.
“The suspension takes effect from Monday, March 19, 2007. The president has also approved the immediate constitution of a panel to investigate the administration, as well as numerous complaints and petitions against the commission”.
The statement went ahead to announce the appointment of Deputy CFI (Technical), B.M. Hussaini to oversee the affairs of the commission in an interim capacity.
Meanwhile, The Source’s findings indicate that the suspended CFI is still in India, where he was when the meeting which culminated to his removal was held.