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Tag: NAICOM

  • SIP: Again, NAICOM cancels policy

    •NCRIB lauds Commission

    The National Insurance Commission (NAICOM) has ordered the withdrawal and cancellation of Operational Guidelines on State Insurance Producers (SIP).

    This came barely 24 hours after a town hall meeting of top management of NAICOM and the Nigerian Council of Registered Insurance Brokers (NCRIB).

    This withdrawal too is coming on the heels of the Commission’s cancellation of the Tier Based Minimum Solvency Capital (TBMSC).

    While the commission introduced the SIP business model to bring about  300 per cent insurance penetration in two years and increase the revenue base of state governments and insurance profits, the TBMSC was aimed at raising insurance company’s capital base, curbing insolvencies and ensuring prompt claims payment, among others.

    The cancellation of the SIP came after brokers under the auspices of NCRIB threatened to sue NAICOM.

    Consequently, the duo met and set-up an ad hoc committee to review the SIP guideline, leading to the commission withdrawing and cancellation of the operational guideline of the SIP barely 24 hours after.

    The council viewed the policy as capable of kicking them out of business and threatened to seek legal redress.

    A circular signed for the Commissioner for Insurance by the Director, Policy and Regulation, Agboola Pius, titled: Withdrawal of circular on State Insurance Producer Operational Guidelines, with reference number, NAICOM/DPR/CIR/20/2018 December 20, 2018 was sent to all insurance institutions.

    The circular reads: “Pursuant to the powers conferred by the enabling laws, the Commission hereby withdraws and cancels the Circular dated November 19, 2018 with reference number NAICOM/DPR/CIR/17 /2018 and titled “Operational Guidelines on State Insurance Producer”.

    NAICOM stated that the withdrawal and cancellation take immediate effect.

    NCRIB expressed its appreciation to NAICOM for the withdrawal, stating that it would lead to the much-desired progress and cohesion required for the industry’s growth.

    NCRIB President, Mr Shola Tinubu lauded the Commissioner for Insurance, Alhaji Mohammed Kari and his team for considering NCRIB’s plea. He described the Commission as a listening regulatory body which has  demonstrated the desire to grow the industry to contribute meaningfully to the nation’s economic growth.

    Tinubu, in a statement noted that the gesture would further enhance the council’s confidence in the leadership of NAICOM, stressing that the confidence reposed in NAICOM was never betrayed.

    “The Council appreciates NAICOM for the magnanimity in withdrawing the guideline as it will lead to the much desired progress and cohesion required for the industry’s growth.

    “We are back on the drawing board to chat a way forward in deepening insurance penetration and entrenchment of MDRI among Nigerians to ensure more financial inclusion and make insurance a front burner in growing the nation’s economy as it is obtainable in other climes.

    “It is pertinent to note that the current leadership of NAICOM has over the years demonstrated unprecedented understanding and all-inclusive regulatory system whereby the council has always been carried along in formulation of policies and guidelines before it eventually become operational,” he said.

  • NGO threatens to sue NAICOM over SIP

    A Non-Governmental Organisation (NGO), Transparent Protection Ltd/Gte has threatened to sue the National Insurance Commission (NAICOM) over the newly released guidelines for State Insurance Producer (SIP) policy.

    The NGO’s solicitors, Mike Onyeka & Associates, in a letter to NAICOM, said the Commission acted ultra vires its powers under Section 49 (1) (b) of the NAICOM Act 1997, which empowers it to make guidelines for insurance institutions only.

    It made this known in a letter titled: “Notice of Intention to Sue Pursuant to Section 51 of the National Insurance Commission Act, 1997”, dated December 3, 2018.

    The reliefs to be claimed by the NGO are, a declaration that the purported “State Insurance Producer” operational guidelines 2018 are ultra vires the powers of the Commission; a declaration that the said guidelines violated Sections 34 and 36 of the Insurance Act, 2003 and are contrary to Section 49 (5) of the National Insurance Commission Act 1997, and any other Order or other Orders as the Honourable Court may deem fit to make in the circumstances”.

    The letter reads: “We refer to a recent publication by National Insurance Commission (The Commission) titled: “State Insurance Producer Operational Guidelines, 2018”,  expected to come into effect on January 1, 2019.

    “The said guidelines are ultra vires the powers of the Commission as enshrined in the National Insurance Commission Act 1997 and Insurance Act, 2003, and we hereby give you notice of our client’s intention to sue the Commission as follows:

    It said the guidelines on “State Insurance Producer” issued by the Commission violated Sections 34 and 36 of the Insurance Act, 2003, and is contrary to Section 49 (1) (b) of the National Insurance Commission Act 1997:

    Through the guidelines on “State Insurance Producer” the Commission has purportedly created “Corporate Insurance Agents” in the states, contrary to Sections 34 and 36 of the Insurance Act 2003. 2. By issuing the said guidelines, the Commission, without reference to the National Assembly, has amended the provisions of the Insurance Act 2003.

    “The Commission acted ultra vires its powers under Section 49(1) (b) of the National Insurance Commission Act 1997, which empowers it to make guidelines for insurance institutions only. Section 65 of the National Insurance Commission Act 1997 defines “insurance institution” as “an insurer, a reinsurer, an insurance broker or loss adjuster…”

    In making the guidelines, the Commission failed to observe the due process of law as required.

    “Reliefs claimed a declaration that the purported “State Insurance Producer” operational guidelines 2018 are ultra vires the powers of the Commission. A declaration that the said guidelines violated Sections 34 and 36 of the Insurance Act, 2003, and are contrary to Section 49 (5) of the National Insurance Commission Act 1997. Any other Order or other Orders as the Honourable Court may deem fit to make in the circumstances”, it stated.

    Contacted, the Commission said it is not bothered by the threat. While reacting to the development, NAICOM’s spokesman, Rasaaq Salami said the Commission is not shaken by the threat to be sued.

    He stated that the Commission has acted in the best interest of the industry, pointing out that the Commission will continue to introduce policies that can grow the industry.

  • NAICOM to license NGOs, others to deepen penetration

    The National Insurance Commission (NAICOM) is planning to license non-governmental organisations (NGOs) and market associations as other distribution channels to sell insurance and deepen penetration, its Commissioner Mohammed Kari, has said.

    This is aside the newly-introduced policy by the Commission, the State Insurance Producers (SIP), aimed at empowering states to sell insurance as agents.

    In an interview with reporters in Ibadan, Kari said the Commission was optimistic that the SIP policy would increase insurance penetration to about 300 per cent within two years.

    He chided insurance operators, especially brokers, who are averse to the Commission introducing more distribution channels to sell insurance in the industry.

    He said the operators should rather join the Commission to think of more channels to sell our business, noting that insurance was yet to get to the nooks and crannies of the country.

    He said the SIP policy would aid the enforcement of compulsory insurance and provide jobs across the country.

    He said the policy would also grow insurance contribution to Gross Domestic Product (GDP) and boost premium generation of the industry.

    He further disclosed that the Commission would open offices in all state capital to support the states, adding that the Commission would build 20 new offices before 12 months to cover the whole country.

    Kari said: “We should think of more channels to sell our business. We cannot continue to concentrate on only the ones we know like brokers and agents because they have exhausted their strength. They are only interested in corporate business.

    “Some insurance operators, too, are more comfortable doing corporate business. They don’t want to go to my village to convince anyone to insure. They said they don’t want to go to Maiduguri for instance because of Boko Haram and this is one of the reason why SIP has become very interesting to us.

    “The SIP has a juice and an incentive. The states are going to make Internally Generated Revenue (IGR). The good thing is that we are going to control what they are doing because they have been selling insurance illegally with insurance companies. But we will  control how insurance is sold in the states. And to support them, we will open offices in all state capital. Before 12 months, we would have covered the whole country and we will build 20 offices.

    “The biggest incentive to government to support this policy is that when they are licensed as an SIP, they will ensure of enforcement and also do their own local law to punish anybody who does not conform with our own law. Also, insurance companies must have offices there to get the business placed with them by the State. “

    Kari said the SIP would create employment and the economy would boom.

    “The SIP will create employment. Some landlords will get rent. You can imagine if every company we have  opens two or three additional branches. It will improve insurance coverage. People that don’t know insurance will see signboard and ask what do you do and this way, insurance companies will have new converts.

    “But, most importantly, they will be there to target other consumers other than the SIP. And because the state governments that will be generating IGR are there, employment will be created, companies will pay tax, people will go to the market and buy food and the economy will boom. It is going to be very likely produce almost 200 to 300 per cent increase in penetration within two years. We are also reviewing the other distribution channels. One of them is the NGOs and market associations. It will be huge,” he added.

  • NAICOM restructures, creates new directorates

    The Governing Board of the National Insurance Commission (NAICOM) has approved the restructuring of the commission to accommodate three new directorates and state branch offices across the country.

    The commission in a statement by the Assistant Director, National Insurance Commission (NAICOM), Rasaaq Salami, stated that the new structures brought the number of directorates in the Commission to nine.

    The Commission said the exercise was part of the efforts at repositioning the commission for better service delivery.

    The statement read: “The new Directorates include Commissioner for Insurance’ Directorate; Lagos Office; and Legal and Liquidation Directorate. The supervision and inspectorate directorates have been merged into one inspectorate directorate while the authorisation and policy directorate have been split into two separate directorates, namely policy and regulation directorate and corporate governance, enforcement and compliance directorate.

    “As part of the exercise, Mrs. Adeshola Obeya, has also been appointed as the Acting Secretary to the Commission. All changes and appointments are with immediate effect. The restructuring is part of the Commission’s efforts at repositioning the Commission for better service delivery.’’

  • NAICOM cancels recapitalization, reclassification of insurance companies plan

    The National Insurance Commission (NAICOM) has withdrawn and cancelled the circular on Tier Based Minimum Solvency Capital (TBMSC) policy meant to recapitalize and reclassify insurance companies.

    The circular has since sent shockwaves within the insurance companies and observers across the continent.

    While some operators who have expended millions on compliance procedures on the policy describe it as a shame on the commission, others who had rejected compliance and proceeded to court to challenge the commission feel vindicated that the policy was a ploy to take over their companies.

    A circular signed by the Director, Policy and Regulation, NAICOM, Pius Agboola, for Commissioner for Insurance, entitled: Withdrawal of Circular on Tier Based Solvency Capital Policy for Insurance Companies in Nigeria and issued to all insurance companies, reads: “Pursuant to the powers conferred by the enabling laws, the commission hereby withdraws and cancels the circular dated August 27, 2018 with reference number NAICOM/DAPCIR/14/2018 and titled Tier Based Solvency Capital Policy for Insurance Companies in Nigeria.”

    The circular, which stated that the withdrawal and cancellation take immediate effect, did not give any reason for the cancellation of the policy.

    Observers are of the view that the withdrawal and cancellation may probably be connected to the litigation by shareholders who were not comfortable with the policy.

    An observer, who spoke on condition of anonymity, described the action by NAICOM as shameful and sad.

    He said the development is strange and only means that the commission has lost the battle to get the industry on the right path.

    He wondered why a policy that was expected to encourage growth through partnership and merger and acquisition would be cancelled with no reason given by the commission.

    He noted that the banking sector has been able to recapitalize many times without a problem, but it has become difficult for the insurance sector to do the same successfully.

    A CEO of one of the companies said his organization had spent money trying to comply with the policy since its introduction on August 27.

  • NAICOM releases guidelines for state insurance producer

    The National Insurance Commission (NAICOM) yesterday released operational guidelines for State Insurance Producer (SIP) across the 36 states of the federation, including the Federal Capital Territory (FCT).

    The SIP, which key responsibility include, facilitating the sale of compulsory classes of insurance within the state jurisdiction and all classes for its principal insurance, is also an agency of a state government licensed by NAICOM to provide intermediary services as defined by the guideline issued by the commission and also remunerated by the provisions of the guideline.

    According to the Commissioner for Insurance, Alhaji Mohammed Kari, the policy is expected to take off on January 1 next year.

    “The state government shall be responsible for all the acts, commissions and omissions of its appointed insurance officer and every other staff in its employment acting on insurance related issues.

    “Any disputes arising between a State Insurance Producer and an Insurer or a client, or any other person either in the course of its engagement as an intermediary or otherwise may be referred to the Commission by the person so affected; and upon receipt of the complaint or representation, the Commission shall conduct an enquiry or an inspection or an investigation on the complaint or the representation as may be necessary.

    “Once licensed to operate by the commission, the SIP shall enter into Memorandum of Understanding (MoU) as may be sanctioned by NAICOM, with approved insurance companies in its jurisdiction for the purposes of placement and management of insurance business within a state,” Kari said.

    The NAICOM chief said while SIP will be empowered to penalise defaulters according to the laws of the states, it will equally maintain proper records of individuals and organisations bound by the requirements of the compulsory classes of insurance and monitoring the compliance.

    The apex insurance sector regulator has promised to open 20 new branch offices across the states of the federation for strict management and enhancement of insurance penetration.

     

  • NAICOM to release state insurance policy guideline next week

    The National Insurance Commission (NAICOM) is partnering state governments to deepen insurance penetration,as the Commission will next week release the new distribution channel guidelines called the State Insurance Producer (SIP).

    Commissioner for Insurance, Mohammed Kari, who made this known at the Chartered Insurance Institute of Nigeria (CIIN) 2018 Education Seminar in Ibadan, Oyo State capital, said the operational guideline shall come into effect on January 1, 2019. To complement the SIP policy, the commission will be opening 20 new branch offices in the states across the nation with each Geo-political zone getting four branches.

    Kari noted that the SIP will be an agency of state government licensed by NAICOM to provide intermediary services as defined by the guideline issued by the commission and remunerated according to the provisions of the operational guideline.

    He said the key responsibilities of SIP include, facilitating the sale of the compulsory classes of insurance within the state jurisdiction and all classes for its principal’s insurance and that additional services and products will be considered in the future, depending on the success of the initial.

    Other duties, according to him, are exercise on defaulters the power to penalise them according to the laws of the states and maintain proper records of individuals and organisations bound by the requirements of the compulsory classes of insurance and monitoring the compliance.

    The Commissioner said once licensed, the SIP shall enter into Memorandum of Understanding (MoU) as may be sanctioned by NAICOM with approved insurance companies in its jurisdiction for the purpose of placement and management of insurance business with approved insurers, which have branch offices in the state.

    Highlighting the benefits accruable from the SIP initiative, he maintained that it will help to meet the government’s expectations with regards to Economic Recovery and Growth Plan (ERGP) in  job creation, poverty prevention and confidence in the face of risks.

    Other benefits are: answer to the saturation in the corporate segment, improve the image of the insurance industry and brand building for individual insurance institutions.

    The NAICOM boss said insurance plays a pivotal role in financial inclusion as it reduces poverty line, helps people to manage their risk and protects them from negative adverse effect of any unforeseeable circumstances and increases access to other financial services.

    Oyo State Governor Senator Abiola Ajimobi has offered NAICOM free land to build its office in the state.

    He commended the CIIN for educating insurance practitioners and urged insurance operators to deal with negative perception people have about insurance; develop quality services and superior value to customers; introduce minimal premium and tackle the menace of quacks and fraudulent practitioners.

    He said the state has resolved to set up a Global Micro Insurance agency that will be private sector-driven.

  • ‘GNI has not erred against SEC, NAICOM rules’

    Great Nigeria Insurance Plc has never received any warning, query or sanctions regarding insider trading from the Securities and Exchange Commission (SEC) or National Insurance Commission (NAICOM), which both provide regulatory framework for the company, Managing Director of the underwriting firm, Mrs. Cecilia Osipitan, has said.

    This followed allegations by the House of Representatives Sub-Committee on Capital Market and Institutions, following the public hearing on Wednesday, October 31, 2018.

    Mrs. Osipitan in a statement  in Lagos, said the allegation by the Sub-Committee was incorrect.

    She said it has come to the notice of the Board of Directors and Management of GNI that the House of Representatives Sub-Committee on Capital Market issued a statement on Monday, November 5, 2018 threatening to authorise SEC to take over the Management of GNI.

    She assured the company’s shareholders and the public that the organisation was compliant with all the rules and guidelines of the various regulatory agencies that oversee its operations making all the allegations of insider dealings, failure to pay shareholders’ dividends, tax evasion and failure to comply with corporate governance regulations inaccurate.

    She stated that the restructuring process put in place by the Board and management has boosted the firm’s retained earnings of circa from (N2.4billion) in 2009 to (N0.59billion) in 2017. This improvement in retained earnings was achieved through organic growth only.

    She added that the firm has also been meticulous about making tax remittances to both the state and Federal Government and has up-to-date receipts to corroborate this fact.

    While allaying the fears of all stakeholders, she said the firm will ensure that the misconception regarding its operations will be resolved with the Committee.

    She explained that the inability of the firm’s representative to attend the Committee’s meeting was unavoidable and same was duly communicated to the Committee. She further stated that the firm has forwarded to the Committee written detailed responses to all questions raised to set straight earlier communicated misrepresentations and will be willing to answer further questions that may arise.

    “Great Nigeria Insurance Plc is a compliant corporate entity and is not in any way associated with any of the allegations raised in the publication,” she said.

  • Industry roadmap crucial to financial inclusion target, others, says NAICOM

    The National Insurance Commission (NAICOM) has said its road map on the insurance industry, if well implemented, will position the industry to answer substantially to its assigned role in the national financial inclusion strategy.

    Commissioner for Insurance Mohammed Kari, who spoke while presenting a paper at an insurance forum in Abeokuta, the Ogun State capital, said the insurance industry needed to capture more Nigerians to have protection for the industry and meet its target under the National Financial Inclusion strategy.

    Worried that insurance penetration is still very low at 0.5 per cent, he said a study adapted from EFInA on Access to “Financial Services in Nigeria, 2016 Survey”, showed that while 20 per cent of Nigerians have not thought of getting insurance cover, 19 per cent do not believe in insurance.

    In the same vein, 15 per cent cannot afford to pay for insurance, 15 per cent said they have nothing to insure, 10 per cent does not know the benefits of having one, 11 per cent does not know where to get one, seven per cent believes insurers are cheats and do not settle claims while three per cent will not insure for religious reasons.

    Overall, he said, awareness and education constitute 60 per cent reasons for Nigerians not having insurance while poverty constitutes 30 per cent, failure of insurance constitutes seven per cent and belief system constituted three per cent.

    He said strategic issues for inclusive insurance market would include unsuitable products and services; fake insurance certificates; poor claims payments; insurance fraud; high expense ratio; weak IT environment and low data quality.

    Speaking on the implication of  EFInA findings for financial inclusion and the challenges, he said: “Financial institutions are short-term oriented and not disposed to investing in innovation that financial inclusion requires.

    “Low-income people are suffering from greater levels of poverty, less employment and income-generating opportunities; more concerned about survival and marginal economic activities.

    “The opportunities are, however, that the fact that there are large numbers of unbanked people that do not have Insurance too; market for a broad range of relevant products and services (micro-insurance, micro-pensions, etc.) via all channels channels; Small and Medium Scale Enterprises (SMEs), agricultural producers, households and individuals, especially those in the informal sector; and women and youth (under-served groups)”.

    The Commissioner, who lamented that the Commission has attempted three times to implement a roadmap for the industry, noted that it is yet to work because of time spent on development, stakeholder’s commitment and focus, stressing that the iindustry’s strategic intent is to establish, develop and maintain a  fair, safe, stable and inclusive  insurance market for the protection of beneficiaries of insurance contracts, competitive returns to investors and optimal contribution to Nigeria’s economic development

    “Nigeria has an abysmally low insurance penetration when compared to its peers and other benchmarks jurisdictions. Therefore, with the necessary and sufficient interventions, the current level of insurance penetration 0.5 per cent can be substantially improved upon.

    “To be an innovative insurance market in Africa noted for high level of capacity, transparency, efficiency, stability and inclusi-veness supporting the economic growth agenda of the country and attaining optimal  rate of insurance penetration at all times,” he said.

  • NAICOM urges collaboration among regulatory agencies, others

    To bridge the huge insurance gap in the country, there is need for collaboration between the National Insurance Commission (NAICOM) and other regulators both in Nigeria and other countries, Commissioner for Insurance, Mohammed Kari, has said.

    The Commissioner, who was represented by NAICOM Director for Inspectorate, Pius Agboola, spoke at the Risk Frontiers West Africa 2018 conference in Lagos.

    He said the collaboration between NAICOM and other foreign regulators is crucial for experience sharing.

    According to him, collaboration among insurance operators, other operators, NAICOM and other partners such as EFInA, GIZ (a German Corporation for international o-operation), A2II (Access to Insurance Initiative), MFW4A (making Finance work for Africa), among others, cannot be over-emphasised.

    He said insurance should be perceived not as a protection mechanism, but more importantly as a partnership that allows individuals and businesses to spread their wings and go to where otherwise they would not have dared to.

    He noted that one important observation to make is whether individuals and businesses have been able to spread their wings everywhere to enable them take un-imaginable risks and enjoy the associated rewards.

    The answer, he said, is the existence of insurance gap, which he described in his presentaion as the insurance protection gaps.

    Speaking on insurance protection gaps, he described uninsured losses as a proportion of total economy losses; uninsured people as a proportion of the total population; insurance actually purchased against economically beneficial coverage; actual insurance penetration against benchmark and financially excluded adults in insurance as a proportion of total adults of a country.

    He highlighted noticeable insurance gap areas for mature markets and economy as natural catastrophes, cybercrimes and risks; healthcare; pensions; and emerging risks.

    For frontier and emerging markets such as Nigeria, he said there are noticeable gaps in all areas.

    He, however, noted that insurance gaps in certain types of insurance may be more pronounced in one country than the other.

    He said NAICOM  has been trying to bridge the insurance gaps by working at root causes and providing remedies.

    He said: “To bridge insurance gaps in Nigeria, the Commission engaged in specific regulatory initiatives. They include improving insurance penetration and insurance literacy level; and Proposed Tier Based Solvency Minimum Capital (TBMSC).

    “The Commission improved insurance penetration by introducing stand-alone full license for Micro Insurance organisations while two Takaful Insurance licenses have been issued. Similarly, Bancassurance partnership with conventional banks has started while microfinance banks are in progress

    “Partnership with relevant agencies and state governments on compulsory insurances implementation is in progress while distribution channels are being expanded. Co-ordination with relevant government agencies for effective insurance of government assets is ongoing while we have partnership with relevant government agency like Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) on agriculture index insurance.”

    Speaking on how the Commission has been working to improve insurance literacy level, he said: “The Commission partnered the operators on awareness creation through the medium of Insurers’ Committee; partnered with foreign development agencies for sponsorship; reinforced our zonal and branch offices on insurance education at their domain

    “On the proposed TBMSC, we plan to encourage specialisation among insurers; strengthen insurer’s capacity; Improve insurance penetration; attract foreign investment; and Encourage healthy competition. However, the importance of collaboration towards reducing insurance gaps in developing nations cannot be over-emphasised.”