or allegedly presenting fake documentation to the Nigerian National Petroleum Corporation (NNPC), about 50 brokers have been banned for between two and five years from bidding for the corporation’s Consolidated Insurance Package (CIP) which the 2020/2021 cover begins tomorrow April 1.
The affected brokers were allegedly detected by the corporation during the selection process which held late last year for the 2020/21 insurance cover which begins tomorrow Wednesday 1 April 2020 and ends March 31, 2021.
Though the details of the affected brokers are still unknown, findings from both the National Insurance Commission (NAICOM) the sector regulator and the Nigerian Council of Registered Insurance Brokers (NCRIB) showed the two bodies have not been officially notified of the names of the brokers who allegedly falsified their records, according to a top management staff at the commission.
The bid for the CIP was held separately last year for the underwriters and the insurance brokers. Bidding for underwriters held November 12 and that of the brokers held two days later, specifically November 14.
For the underwriters’ leadership category, 42 insurers contested this year’s coverage for which premium was said to have been paid Monday 30 March.
Custodian and Allied Insurance is appointed the leader on the oil package while Alliance Insurance is said to be leading on the Group Personal Accident (GPA) and workmen’s while unconfirmed information says WAPIC Life is leading on Life insurance.
Of about 524 insurance brokers that bided for the NNPC plum account on November 14 last year, InsideBusiness learnt the corporation initially requested the insurance regulator to verify the status of 125 brokers, after which another six was added, bringing the number of brokers which NNPC verified its profile including annual reports and accounts to 131.
Findings show that about 125 brokers were prequalified while about 75 were eventually approved to participate on the insurance business described as one of the juiciest in the Nigerian market. The remaining 50 were allegedly banned.
At the last November 14 bids by the brokers, 263 bided for the non-oil assets while 261 brokers were interested in the oil assets.
WorldMark Insurance Broker is said to be leading the brokerage pack on both the oil and the non-oil package, thereby destabilising frontline brokerage firm, Hogg Robinson that has made the leadership position its exclusive preserve for several years.
Hogg Robinson led the oil assets for the 2019/2020 insurance cover which expires today March 31 while Worldmark led the non-oil assets package for the same period.
The bid process was thrown open after a 2010 exposure of under-hand dealings in the selection process owing to non-tendering of the process, and also because of proven cases of inflation of premium paid on the business between 2001 and 2010.
Since 2011 however, and after the alarming discoveries during the 2012 investigative hearing by the House of Representatives’ Committee on Finance under its former chairman, Abdulmumin Jibrin, the NNPC management opted for tendering of its insurance cover and the open bidding process.
This, has since, attracted large participation of both underwriters and brokers owing to the huge size of the NNPC account and also, because of the 70 per cent of the business that must be domesticated in the local market in line with the provisions of the Nigerian Local Content Act which aims at developing local capacity.
During this year’s selection process, both the underwriters and the brokerage firms were scored on the requirements which include provisions of the certified true copy of their Certificate of Incorporation issued by the Corporate Affairs Commission (CAC), three years audited account covering 2016 to 2018 which was duly certified by their regulator, the National Insurance Commission (NAICOM) and a Certified Tax Clearance from the Federal Inland Revenue Service (FIRS).
Also, certification from the National Pension Commission (PenCom) and also from the Industrial Training Fund (ITF) were parts of the requirements for participation in the bid process.
Others are professional indemnity policy, evidence that none of the directors of the bidders has interest in NNPC, Bank reference, staff and the company’s profile, profile and credential of those that will do the job if appointed, experience in the class of business been vied for, and also, the volume of businesses being handled by the bidders and the profile of their clients.
The bidders were also scored, using the profile of the five of their biggest accounts, their NCRIB Certificate, Bureau of Public Procurement (BPP) certification, and the payment of N50,000 for the processing of their bids for the class of business being vied for.
A bidder at the November 14 bid opening for brokers confided in InsideBusiness that the exercise was witnessed by the Bureau of Public Procurement (BPP), the Nigeria Extractive Industries Transparency Initiative (NEITI), and NAICOM during which the corporation’s Group Managing Director, Melle Kyari reiterated the transparency of the selection process.
“The GMD told those who might have parted with money to go and collect it back” noted one of the bidders who said the GMD gave an indication of a transparent process.
At the last November 12 opening of bids for the insurance underwriters, the Chief Financial Officer of the corporation, Umar Ajiya, said a key attribute of an organization like the NNPC was the protection of its assets, adding that the exercise was in pursuance of that objective, assuring that each of the bids would be assessed on its merit.