Jide
Orimolade is the Managing Director and Chief Executive Officer, Law
Union and Rock Insurance Plc. An insurance professional with valuable
experience that has spanned over two decades, both within and outside
the country...
Orimolade holds a Bachelor of Science (Honours) degree in
Insurance from the University of Lagos, Akoka, and a Masters degree in
Marketing from the same university. He started his insurance career in
1989 with the former Financial Assurance Company Limited as an
underwriting executive.
Before joining Law Union & Rock
Insurance Plc, as the Managing Director and Chief Executive in November
2014, Orimolade worked with AIICO Insurance Plc. as an Executive
Director from December 2009 to October 2014 when he voluntarily
resigned. His immense leadership skills and contribution impacted
marketing, technical, claims, re-insurance and strategy, generating
enormous yearly increase in gross premium written for the company. He
has at some other times given valuable information to builders on why
they should insure the buildings above two floors in compliance with the
National Insurance Commission (NAICOM) guidelines on insuring of
buildings. In this interview with Daily Sun, Orimolade fielded questions
on why people do not insure their high-rise buildings, government
sanctions and financing properties through mortgages.
Excerpts:
Compliance of builders with insuring buildings
Well, for us, we are creating the
awareness but like I mentioned, the total industry must be involved in
the direction of creating this awareness. We know it is compulsory
because the regulators have made it compulsory. It comes under the
market and development restructuring initiative. What the regulator has
promised us is that there will be a road show that would move round the
states. Lagos State is already aware of it but I believe that other
states too should be in the know. But we at the Law Union & Rock
Insurance have the opportunity to create this awareness and that is why
we are doing it.
The level of compliance among builders above two floors
For that, the regulator needs to help us.
I mean, if you look at what is happening in the pension industry, you
will see that people who are not complying know that they need to apply
for a particular contract or they look for business and they can’t do
it. So our appeal is that for this to be enforceable, we can go places
because once it is enforced, it becomes part and parcel of what these
builders or people that have these public buildings can’t shy away from.
So it is all about enforcement, once the enforcement is put in place, I
believe that people will key in; they have no choice. But you see, for
us at Law Union & Rock, it is for us to continue to create that
awareness so that people can know that it is compulsory for them to obey
the Section 64 and 65 of the the insurance law.
Insurance of high rise building
Of course, I have and what I tell them
is; number one, you have to look at it in terms of fire. Assuming fire
happens at the building and there are tenants, there are liabilities
involved, then how will they come out of such liabilities? People at
times think that may be the rate of the premium they are going to pay is
going to be on the high side so we educate them on that; look, this is
the rate you are going to apply and this is the premium you are going to
pay in respect of this building. So we educate them on that. But I
believe that with more awareness in the market, people will key in, they
will know the right thing to do.
Commensurate enforcement
Enforcement in the sense that if you have
a public building and it is not insured and you want to bid for
business, let it be part of the conditions they have to meet for
government to allow them bid for that business. If it comes into
operation, you will find out that all owners of public buildings and
high rise buildings will have no choice but to insurance them.
Wither the former punishment
That is what I am saying. It is not
enough. I don’t think it is enough. If you look at developed countries,
you can hardly take your car on the road without insurance. You know
that if you do it and the police get you, you face a jail term and apart
from that, when you come out, you can’t drive on the road again. So
that is what we call enforcement. When those things are in operation,
people will have no choice but to key in.
Why people borrowIt is good to borrow. Individuals,
organisations and governments borrow money from various sources, ranging
from the informal to formal lending institutions. They borrow to meet
their needs, to run their business operations, to acquire assets or for
personal consumption. Loans can be rewarding when used for the purpose
for which they were taken and when paid back as at when due. However,
loans, when misused, abused or not paid, can become a burden and a
source of financial embarrassment. Lenders and borrowers both have
duties, obligations and rights that should be fulfilled in a mortgage
contract. The rights of both parties must be respected and upheld to
ensure that mortgage contract is hitch free.
Suitability of mortgage for borrowers
The lender must ensure that the mortgage
the borrower intends to take is suitable for his needs. Too often,
borrowers face predatory selling practices with lenders pushing
expensive, complex products borrowers do not understand and cannot
afford. This should not be. Lenders should discourage prospective
homeowners from borrowing more than what they need or what they can
afford. For example, encouraging a borrower to buy a luxury apartment in
a high brow area when the borrower does not have the capacity to
finance the loan, or take new loans when the borrower has other
subsisting loans or borrowing simply because the lender is giving a
preferential interest rate, is wrong.
Borrowers’ loan affordability
Borrowers must be able to afford the loan
they are requesting. Lenders need to know borrowers’ current financial
standing. They should ascertain borrowers’ ability to afford the loans
by carrying out a due diligence check. This requires a careful
assessment of the income and existing financial commitments of
prospective borrowers to ensure that the value of the loan taken is
within the range of what the borrower can effectively repay without
becoming over-indebted.
In conducting this assessment, lenders
should also take into consideration the borrower’s anticipated income or
in the case of a couple, a joint income stream with a spouse as this
may enhance the potential value of a mortgage the borrower can take.
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