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{
    "id": 3683,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/3683/?format=api",
    "text_counter": 528,
    "type": "speech",
    "speaker_name": "Mr. Abdikadir",
    "speaker_title": "",
    "speaker": {
        "id": 1,
        "legal_name": "Abdikadir Hussein Mohamed",
        "slug": "abdikadir-mohammed"
    },
    "content": "Thank you, Madam Temporary Deputy Speaker. I will be very brief. Let me also join my colleagues in congratulating the Ministry for the work they have done on the financial infrastructure and for modernizing that infrastructure. This, indeed, is a major step in that modernization effort, especially with respect to insurance, the insurance industry and the regulation in the insurance industry which for a long time has been in the doldrums as indicated by the failures that insurance companies had before. Indeed, it was the order of the day that insurance companies as a rule will ask their customers to carry stickers that say, “Do not accept liability”. In many places it is illegal to even deny liability before liability has occurred. The whole idea of insuring is to ensure that you get indemnified upon an accident occurring. So, the need for modernization of this industry certainly cannot be gainsaid. In terms of streamlining liquidation and insolvency in the insurance industry and indeed in the financial industry, if you look at the banking industry, some of the institutions that were liquidated, 30 years ago, the liquidation processes are still going on. The Deposit Protection Fund at the CBK essentially has become a provider for jobs for those people when you are supposed to have liquidated and wound up, so that you move forward with the process. So, it is important that we modernize the liquidation and winding up process and professionalize it and ensure that the moral hazard of retaining that process for as long as possible so that people can earn salaries and so that you maintain large bureaucracies is not handled. Finally, when it comes to regulations and regulators, usually this House makes laws, giving powers to institutions, so that they can create rules and regulations within those institutions. However, most times, those rules and regulations are overstepped, so that the institutions essentially become mini-legislatures where they create rules whether prudential or otherwise, that mostly are meant for good, but are sometimes overstepped. One of the issues, whether it is in the insurance industry or the banking industry, is the issue about independent directors. Whether a shareholder can be an independent director and why the traditional definition is that an independent director is one who is independent of management. These institutions have now decided to come up with the rule that an independent director is somebody who has absolutely nothing to do with the institution who has no shareholding, which really encroaches on the rights of shareholders if they are not in management. Therefore, we will, indeed, propose amendments to those particular rule-making processes, so that those rules are brought to this House and Parliament can look into them. Having said that, this is really a major step forward, I congratulate the Ministry and I support."
}