EFCC Beams Fresh Searchlights on Insurance Fraud

The Executive Chairman of the Economic and Financial Crimes Commission, EFCC, Mr. Ola Olukoyede has declared the resolve of the Commission to beam stronger searchlights on the nation’s insurance industry.

He made the declaration in Abuja on Wednesday, November 13, 2024 when a delegation of the management team of National Insurance Commission, NICOM, led by Commissioner of Insurance and the Chief Executive Officer, CEO, Olusegun Ayo Omosehin paid him a courtesy visit at EFCC’s corporate headquarters

Speaking at the occasion, Olukoyede noted that “The issue of insurance fraud is a major albatross to our economic development. We are ready to take up some of these cases particularly insolvency that is attributed to fraudulent management of these insurance companies. It is something that we must not tolerate, and that is where the issue of regulatory compliance takes the front burner in countries where things work.

“We are ready to work with you and when they see us working together, it would send signals to the industry players that it is no longer going to be business as usual. Just be ready to give us the necessary information that we need to work with. As a matter of fact, beginning from today,  we are going to start looking at insurance companies very seriously just the way we are looking at the banking industry so that the industry can grow.”

The EFCC boss decried a situation where insurance companies are only keen on accepting premiums and not to settle claims. “They are very fast at collecting premiums but when it comes to settling claims, they would start coming up with all kinds of excuses. When you go to a place like the US and Europe, you will discover that the scale of activities in insurance companies are probably larger than those of the banks. We will collaborate with you. We are going to lend you our teeth so that you can bite.”

Some of the modalities of the collaboration will involve operational realignment. “We have a Bank Fraud Section, we are now going to review the scope of work of that section to include insurance so that we can take care of other emerging issues in the financial system.  

Earlier in his remarks, Omosehin who requested EFCC’s intervention in cleansing Nigeria’s insurance industry and in ensuring that defrauded policy takers get justice,  noted that policy takers are always at the losing end in the event of collapse of insurance companies as a result of corporate governance failures.

“Where insurance institutions are failing,  we are expected to intervene and take appropriate regulatory actions. We have a history of having seen institutional failures among some of the entities that we regulate. The beginning of such institutional failures often come from corporate governance violations and this cuts across several areas including where the commonwealth of such institutions have been mismanaged by some individuals and the people that suffer the consequences are the policy holders who have put in their life savings in those institutions. The institution goes down and they walk away with the loot. It is our responsibility to report such situations to appropriate sister agencies who can ensure that they are brought to book. This is one of the few things that we have put in the burner to come to the EFCC,” he said.

Speaking further, he observed that “typically what you find in this environment is people trying to use different means such as the judiciary to frustrate our efforts just to keep us away from doing what we ought to do. This is where we need some of our sister agencies and one of such is the EFCC”