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Tag: NAICOM

  • NAICOM orders 17 firms to get fresh licences

    THE National Insurance Commission (NAICOM) has drected 17 firms to acquire new microinsurance licences within 18 months or face sanctions.

    This followed the release of the revised microinsurance guidelines about three weeks ago.

    But some firms’chief executives are jittery over the revised guidelines, saying they would impose more costs on their businesses.

    Speaking at a seminar organised by NAICOM for reporters in Benin City, the Edo State capital, the Commissioner for Insurance, Mohammed Kari, said the ultimatum on the guidelines, which took effect from January 1, must be complied with by the operators.

    Kari, represented by the commission’s Deputy Commissioner Technical, Sunday Thomas, said any insurance firm that fails to acquire new  licence, would have its non-life microinsurance arm wound up within 18 months while those with life classes would be  barred within 24 months and the business transferred to another firm.

    NAICOM, in section 10, sub section 1 and 2 of the revised Microinsurance guidelines released recently to the public, said: ‘’Existing conventional microinsurers shall wind down their window operations for non-life classes within 18 months from the effective date of this guidelines and in not later than 24 months transfer the life classes to a dedicated microinsurance company.”

    The guideline also states that no policy should be renewed nor new one issued with an expiry date beyond the stated date.

    ‘’By this directive, non-life conventional insurers operating microinsurance as a window operation are given till June 2018 to wind up this operation while the life operators has December 2018 as the deadline to do same,’’ it stated.

  • NAICOM fines insurance firms N1.4b for infractions

    The regulatory body of the insurance sector, the National Insurance Commission (NAICOM), has fined some insurance firms over $4 million (N1.46 billion) as penalties for various infractions.

    The Commissioner for Insurance, Mohammed Kari, who stated this  over the weekend at a two-day seminar for insurance correspondents  in Benin, the Edo State capital, said NAICOM will up its ante this year.

    Kari,  who was represented by the Deputy Commissioner, Technical, Thomas Sunday, said the Commission has stepped up its regulatory action and, saying there would be no sacred cows anymore in the sector.

    He pointed out that any operator that defaults, will be given opportunity to defend itself, but would be made to pay the price if found to have defaulted, stressing that adequate warnings have been given to the operators.

    Speaking on some areas where the Commission has issued warnings to operators, he said operators were in the past granting blind insurance covers to clients without having information, or data of the type of risks they were insuring, pointing out that the Commission is trying to eliminate blind covers that have caused the industry a lot of trouble.

    He said: “For instance, insurers grant covers to government agencies and parastatals without knowing, or having the data of workers to be covered.’’

    He added: “But no company will dare do it again because we have issued circulars to them to stop such transactions from occurring again. They must not even insure the Ministry of Defence without having their information otherwise insurance cannot be granted.

    “There is no where in the world where blind covers are granted. We have step into it and have issued appropriate circulars warning the underwriters and we are sure they heard us very clearly.’’

  • NAICOM issues revised micro insurance guideline

    •To serve low income earners, others

    The National Insurance Commission (NAICOM) has released a revised microinsurance guideline for the underserved and excluded segment of the populace.

    The commission said the guideline was also introduced as part of the financial inclusion strategy to stimulate growth in the insurance subsector especially the retail end of the market and drive insurance penetration.

    The guideline, which comes to effect on January 1, 2018, establishes uniform set of rules, regulations and standards for conduct of microinsurance business.

    The guideline was made available to reporters by the Commission’s Head, Corporate Affairs, Rasaaq Salami in Lagos.

    The high points from the revised guideline are from Section 2, 3 and 4 as against the previous guidelines released in 2013 when business as established in the country.

    “Section 2 explains the  Microinsurance Market Structure and states the classification of microinsurance underwriters as Unit Microinsurer, State Microinsurer and National Microinsurer.

    “Section 3 explains Registration Requirements states the minimum capital requirement for Unit Microinsurer as N40 million; State Microinsurer as N100 million and National Microinsurer as N600 million.

    “Section 4 explains Prudential Standards and states that any microinsurer intending to commence microinsurance business shall have a minimum capital as stipulated in Section 3 or as may be issued by the Commission from time to time.”

    The guidelines also showed that: “On statutory deposit, a microinsurer shall maintain with the Central Bank of Nigeria (CBN) a statutory deposit of 10 per cent of the minimum capital requirement.

    “As regards liquidity status, a Unit Microinsurer shall, in respect of its insurance business in Nigeria, maintain at all times a 50 per cent Liquidity Margin being the excess of the value of its admissible current assets in Nigeria over its current liabilities in Nigeria.

    “A State Microinsurer shall, in respect of its insurance business in Nigeria, maintain at all times a 35% Liquidity Margin being the excess of the value of its admissible current assets in Nigeria over its current liabilities in Nigeria, while a National Microinsurer shall, in respect of its insurance business in Nigeria, maintain at all times a 25 per cent liquidity margin being the excess of the value of its admissible current assets in Nigeria over its current liabilities in Nigeria”, it read.

    In a statement also made available by Salami, the Commission stated that: “As part of the commission’s determination to improve financial inclusion in Nigeria, particularly to the underserved and excluded segment of the populace, the commission has reviewed the Microinsurance Guidelines of 2013, and hereby releases a revised guidelines.

    “The Revised Microinsurance Guidelines will become effective from January 1, 2018. The guideline is part of the financial inclusion strategy to stimulate growth in the sector especially the retail end of the market, drive insurance penetration and service the lower income earners who hitherto have been excluded from insurance”.

  • NAICOM decrees rates for insurance firms

    The insurance industry now has a uniform premium rate for all compulsory classes of insurance products.

    The Commissioner for Insurance, Mohammed Kari, made this known yesterday.   through a circular titled: “NAICOM/AEtP/CIR/12/2018, to all insurance institutions in the country, saying the approved rates became effective from January 1, this year.

    He said the rates will form the premiums insurance companies will charge clients, going forward.

    He stated that the rates were released to the operators as part of efforts to curb the increasing challenge of rate cutting in the sector.

    Kari said: “The Commission has released approved rates for compulsory insurances which include Group Life, Builders’ Liability, Occupier’s Liabilty, Motor Third Party and Healthcare Professional Indemnity Insurance to the operators.

    “Every operator is guided by these rates in their various transactions. Going forward, the commission shall strictly monitor and enforce compliance.”

    Also speaking, the commission’s Head of Corporate Affairs, Rasaaq Salami, said the operators have always had the rates for the compulsory insurances among themselves but they don’t comply with it.

  • NAICOM inaugurates committee on public building insurance enforcement

    NAICOM inaugurates committee on public building insurance enforcement

    The 0.25 per cent premium collected from insurance companies to aid the enforcement of compulsory insurance for public buildings by the Federal Fire Service (FFS) has  accumulated to about N100 million.

    Insurance Commissioner, National Insurance Commission (NAICOM), Mohammed Kari revealed this ater the inauguration of a Technical Committee to drive the enforcement of public building insurance in the country in Abuja.

    Kari, who  was represented by Deputy Commissioner for Insurance, Technical, Mr Sunday Thomas, said NAICOM, under the National Insurance Act 2003  had the responsibility of ensuring that public buildings and buildings under construction were insured.

    He noted that the collaboration with the fire service across the country will improve the level of compliance with Section 65 of the Act, which invariably will impact on the fire fund.

    He said: “The Act provides that 0.25 per cent of premium collected with respect to public buildings are supposed to be accumulated in the fire funds. But over time, these funds have not been forthcoming because the process for collection is not put in place.

    “Therefore, NAICOM in the spirit of transparency and all inclusive administration has decided to bring in those who know more about fire service into this activity. It is the responsibility of the committee to advise the steering committee on how public building funds will be effectively and efficiently disbursed for firefighting in the country.

    He added:“We have the responsibility for collecting of funds, monitoring and also disbursing the funds for the purpose of improving fire activities in Nigeria.”

    According to Kari, the steering committee planned on disbursing the funds for the purpose of training of staff of the fire service both at the federal and state levels.

    He said a portion of the funds would be used to upgrade the activities of the academy of the federal fire service and refurbish/repair firefighting trucks and equipment.

    He said some of the funds would be used for the purchase of vehicles for inspection, investigation and also for the purpose of publicity. The commissioner said that about N100 million had already been accumulated in the funds, adding that a template had been given to the market that would ensure proper enforcement for collection of more funds.

    “The amount has a potential of multiplying itself and unlike what we had, we have set a template by which this collection will be appropriately and adequately remitted into the commission.

    “But whatever we get in the collection is dependent on adequate enforcement of all the buildings that need to be insured. By public buildings, we mean all schools, hospitals, hotels, malls and offices and they have the responsibility to show evidence that they have complied with section 65 of the Insurance Act 2003,”he said.

    The commissioner called on the committee and all stakeholders involved to collaborate, create the necessary awareness so that the required result would be achieved.

    He said that if this was done, it would reduce the alarming incidents of fire outbreaks and building collapse as the FSS would be adequately equipped to carry out their mandate. The technical committee is chaired by the Acting Director, Authorisation and Policy of NAICOM, Mr Leonard Akah.

    The Controller of Fire Service, represented by the Commandant, National Fire Service Academy, Mr Callistus Agu, said the fund accumulated is a far cry to what the FSS required.

    He expressed the desire and commitment of the FSS to move fire service activities in the country forward.

    “There is a huge gap between the Federal Fire Service and the State Fire Service which is not supposed to be so. It is important for the FSS to be strengthened both at the federal, state and local government levels to ensure economic development of the country.

    “We appeal to government to look into the premium assigned to the fire service as it was not enough to meet the demands of the service.”

    The NIA, represented by the Head, Property and Risk Survey, Goldlink Insurance, Oni Soji, said the association is ready to partner with all stakeholders to drive the enforcement.

    He added that the enforcement would help the association generate more funds and grow premiums that would enable it to pay claims.

    He urged the FSS to come up with a central data which would help the association in doing proper planning. (NAN)

    The committee which was inaugurated by the NAICOM’s Commissioner for Insurance, Mohammed Kari, in Abuja was made up of representatives of NAICOM, the Federal Fire Service (FFS), representatives of states fire service from the six geo-political zones and the Nigeria Insurers Association (NIA). The steering committee on the other hand is made up of the Commissioner for Insurance, the Controller-General of the Federal Fire Service and the Chairman of the NIA.

     

     

     

     

  • NAICOM moves directors, others

    NAICOM moves directors, others

    National Insurance Commission (NAICOM), has redeployed 30 of its staff, amongst them, Directors, Assistant Directors and others across the various departments.

    NAICOM’s spokesperson, Rasaaq Salami, who made this known in a statement, yesterady, said the transfers take immediate effect.

    One of the major changes is the redeployment of the Commission’s Director for Inspectorate, Barineka Thompson, who now becomes the new Director for Supervision, while the Director for Supervision, Olufemi Oba, is now the Director for Finance and Admin.

    The Director, Authorisation and Policy, Pius Agboola is now Director, Inspectorate, while the Head, Corporate Governance, Leonard Akah, is now Acting Director, Authorisation and Policy.

    The Head, Enforcement and Compliance, Ahmad Adamu, is now Head, Complaint Bureau; while Head, Inspectorate Lagos, Monday Faruna Adaji, is to Head, Internal Audit; and Head, Internal Audit, Kamal Barde, moves to Ag. Director, Supervision.

    According to Salami, a total of 23 others in the rank of Assistant Directors and below have also been redeployed.

  • NAICOM workers back after signing MoU 

    NAICOM workers back after signing MoU 

    The National Insurance Commission (NAICOM) has said its members of staff, who went on strike last week have returned to work after signing a Memorandum of Understanding (MoU) with the management.

    Head, Corporate Affairs NAICOM, Rasaaq Salami, in a statement said the strike was called off following an agreement reached between the management and members of staff in a peace meeting brokered by the Minister of Labour and Employment, Chris Ngige.

    The workers protested over unpaid allowances, poor welfare, lack of promotion, working tools and capacity building.

    Other area of grievance include delay in the review of insurance Act 2003 by the National Assembly, claiming that the proposed insurance bill, when passed, would move the sector and the commission forward.

  • NAICOM licenses two Takaful companies

    NAICOM licenses two Takaful companies

    • Islamic insurance is Sharia compliant, says Sanusi

    The  National Insurance Commission (NAICOM) has licensed two Takaful companies to operate while the processing of other applications is on-going, Commissioner for Insurance Mohammed Kari has said.

    Kari, who stated at this the weekend in his goodwill message at the  inuaguration of the Kano Branch of Jaiz Takaful in Kano State, said Takaful Insurance would solve the challenge of public apathy to insurance, religious and cultural beliefs, especially in the North. Takaful Insurance is another name for Islamic Insurance and it is a unique Islamic concept of Sharia compliance beneficial to both Muslims and non Muslims

    Kari said attempts by the Commission and insurance operators to penetrate markets in the northern part of the country with the conventional insurance products have  not yielded the much result due to a number of challenges arising from public apathy to insurance, religious and cultural beliefs.

    He stressed that the compulsory classes of insurance made mandatory by the law for every Nigerian to undertake are still being resisted by both government and people, especially in the northern part of the country due to the challenges earlier mentioned.

    He disclosed that in recognition of the public apathy to insurance, the Commission, in line with the desire to deepen insurance penetration in the country, developed a medium-term initiative code-named: Market Development and Restructuring Initiative (MDRI), to amongst others, promote public understanding and confidence in the insurance industry.

    The initiative, he said, was also aimed at creating awareness of certain vital insurance policies made compulsory by law for the protection of innocent third parties.

    He said:“Such compulsory insurances included motor third party, group life, professional indemnity, builders’ occupiers’ liability and public building liability insurance policies.”

    While certain level of success is being achieved gradually in this regard, the Commission introduced Takaful and Micro-insurance products in the country as an attempt to reach the segment of the market that was either hitherto reached or not comfortable with the conventional insurance products.

    The Emir of Kano, Alhaji Muhammadu Sanusi II, who was at the event, said Islamic compliance insurance scheme serves as an alternative to conventional insurance in the country.

    He said:“Islamic insurance also known as Takaful is a unique Islamic concept of Sharia compliance insurance beneficial to both Muslims and non-Musllims.

    The Royal Father also stated that the system of Takaful insurance is based on the concept of social solidarity, cooperation and mutual indemnification of losses of members.

  • NAICOM frowns at insurers’ huge management expenses

    NAICOM frowns at insurers’ huge management expenses

    The National Insurance Commission (NAICOM) has frowned at the huge management expenses incurred by some insurance companies as the industry spent N294.9 billion in five years.

    The expenses reflected  in a report obtained from the Nigerian Insurers Association (NIA) showed that the amount incurred is from underwriting expenses, salaries, rents and others excluding commission to agents.

    The Commissioner for Insurance, Mohammed Kari, said the commission has restricted the firms  to a certain limit in their spending.

    He stated that curbing management expenses of the companies is in line with one of the commission’s  2017 regulatory priorities.

    He said observations made on the 2016 financial accounts shows that some companies have engaged in high management expenses.

    He said: “From the 2016 financial accounts submitted by some companies, those with high expenditure profiles, have been mandated not to spend beyond certain limit.

    “The decision was taken to ensure companies do not spend unnecessarily to the extent that they would not be able to attend to claims settlement.

    “Our top priorities for this year include market development; capital verification; management expenses of Insurance companies; statutory returns; risk based supervision; information technology; competence of directors senior management and persons in control functions; corporate governance and service delivery”.

    According to the  report obtained from the NIA,non life operators incurred N220.91 billion and life operators N73.99 billion between 2010 and 2014.

    According to the NIA, Non Life insurance companies spent N52.12 billion on management expenses in 2014, representing 0.28 per cent of the N184.97 billion gross premium income made in the year. Whilst Life Companies spent N23.60 billion, 0.22 per cent of N108.58 billion gross premium income.

    In the report, Non Life operations, Investment and Allied Insurance Plc, had the highest expenses, put at N169.50 million, 38.53 per cent of N4.40 million gross premium income it recorded. The firm was followed by Fin Insurance Plc, N854.16 million, 1.07 per cent of N795.73 million underwritten and NICON Insurance Plc, N1.58 billion, out of N9.45 billion GPI (0.17 per cent)

    For Life business, NICON Insurance Plc, had the highest, expending N453.80 million, out of N92.04 million GPI, (4.93 per cent), SpringLife Assurance Plc, N105.28 million out of N32 million GPI (3.29 per cent) and Unic Insurance Plc, N742.81 million, out of N259.31 million GPI, (2.86 per cent).

    The NIA report, stated that the Nigerian Agricultural Insurance Corporation (NAIC) in 2015 wrote a gross premium income of N1.04 billion, but had management expenses of N1.10 billion, a ratio of 1.07 per cent.

     

  • NAICOM to enforce third party insurance, others in Kaduna

    NAICOM to enforce third party insurance, others in Kaduna

    The National Insurance Commission (NAICOM), in partnership with the Kaduna State Government, is set to enforce the nation’s five compulsory insurance policies in the state.

    They are motor vehicle (third party) liability insurance, builders’ liability insurance (buildings under construction), occupiers liability insurance on public building, healthcare professional liability insurance and group life insurance.

    The Commission is seeking the support of the state government in enforcing compliance with the compulsory policies.

    Commissioner for Insurance, Alhaji Mohammed Kari, made this known while speaking during a courtesy visit of the officials of the commission to the Kaduna State government over the weekend.

    The Commission, he said, plans to set up its branch in Kaduna just as it mulls opening new branches across the country.

    According to Kari, enforcement of the policies in the state would include provision of genuine insurance products to the government and people of the state, opening of another veritable source of internally generated revenue (IGR) for the state government.

    He said it would also ensure the creation of employment for the citizenry and would free the government of the burden of having to compensate victims from its scarce resources in the event of occurrence of mishaps or natural disaster.

    He said: “In line with our strategic road-map, the Commission has set out reforms needed to reposition the Nigerian insurance sector to effectively serve our growing population and most importantly the financially under-serviced low-income segment. Notwithstanding Nigeria’s vast population, insurance had a mixture of myth, misunderstanding and ignorance defining it. Cultural issues and attitudes have continued to hinder the role of insurance in fast-tracking Nigeria’s economic growth.

    “In keying into the Federal Government’s Financial System Strategy that visioned Nigeria of being a world’s top twenty economy by the year 2020, (FSS2020 development framework), the Commission initiated the “Market Development and Restructuring Initiative” (MDRI) in 2009. The programme has, among its objectives, the promotion of public understanding of insurance; the building of confidence on the Nigerian insurance market; the enforcement and monitoring of compulsory insurances in Nigeria so as to grow premium income for the benefit of the Nigerian economy, thereby increasing insurance density and its contribution to gross domestic product (GDP).

    “Having completed the first phase of execution, which was devoted to awareness creation across the six geopolitical zones, the Commission is now at the verge of kick-starting the second phase of the MDRI project, which is focused on implementation and enforcement of compulsory insurances across the country. These compulsory insurances put in place by various legislation in the country including the Insurance Act of 2003, are imperative because they mainly protect the interest of the third party.

    “In the absence of our active presence, charlatans have moved in to deceive insurance consumers and government alike that they are offering genuine insurance products and protection. The state was at one time a victim. But for our timely intervention the damage would have been unimaginable. We believe this collaboration will open up several opportunities that will be to the benefit of the state as well as the insurance industry when consummated. We have developed a guideline that will make it for easy execution of the collaboration and partnership.”

    Mallam Nasir El-Rufai, represented by his Deputy, Arch. Bala Bantex, said the state government will continue discussion with NAICOM with a view to ensure insurance implementation and penetration in the state. Promising that the commission request will receive full attention of the government, he added that the idea of sanctions to enhance insurance compliance is non-avoidable.

    He said proper adoption of insurance will contribute to the growth of the nation’s GDP, pointing out that the state government has insured some of its facilities with insurance firms, although, he said, the state would now be more careful in order not to deal with quacks.

    The state government, he pointed out, is making it mandatory for market men and women to insure their goods and assets through insurance, pleading on the commission to always ensure that insurance companies pay claims on insured risks whenever inferno occurs.

    On building insurance, he said, the state government is currently ensuring that quality materials are used for building of structures, but will also be interested in ensuring that buildings and buildings under construction are adequately insured in the state.