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Tag: NAICOM

  • NAICOM, insurers to introduce cover for terrorism victims

    NAICOM, insurers to introduce cover for terrorism victims

    The National Insurance Commission (NAICOM) is working with operators to fast-track the provision of terrorism cover, Commissioner for Insurance, Fola Daniel, has said.

    Daniel, who made this known at the weekend at a seminar for insurance correspondents in Uyo, Akwa Ibom State capital, said the move was necessary to bring relief to victims of terrorists attacks.

    At present, terrorism insurance is  excluded from coverage in Nigeria. It is considered a difficult product for insurance firms to market as the odds of terrorist attacks are difficult to predict and the potential liability enormous.

    But Daniel said it was time for operators to expedite action and design ways of providing insurance cover on terrorism.

    Describing terrorism as the bane of the country, he called on firms to  rise to the challenge of providing cover for terrorism to avert loss of businesses in the industry.

    He urged the firms to take the initiative on terrorism insurance before an agency is set up to provide for risks on terrorism.

    He noted that the commission will work with the operators to see that the government supports the initiative as done in other climes.

    He said the industry has potential for massive growth, adding that the population of the country, if adequately harnessed, will gives an added advantage to the industry to further develop its market.

    Daniel said considerable progress has been made under the Market Development and Restructuring Initiative (MDRI), which commenced in 2009, adding that between 2009 and 2012, policies written rose sharply from 72,180 to 152,181, a whopping increase of 111 per cent.

    He said premium written within the period also rose from N14.93 billion to N28.68 billion increase of 92 per cent.

    Daniel added that the industry in the last three years has had some geometric projections.

    He said: “The industry will achieve well over 100 per cent at the time the performance of 2013 is added to the figures available. Despite the inability of the Commission to attain the one trillion naira mark it planned to achieve through the Market Development Restructuring Initiative (MDRI), in 2009 it has vigorously pursued it across the six-geo-political zones of the country and considerable progress has been made given the above statistics.’’

    He added: “The performance so far shows that  insurance companies are voluntarily meeting up to their obligation without the commission getting involved and are also paying claims payment.

    “Going forward, we will consolidate on the gains made so far and ensure proper implementation of compulsory insurance products to be able to enhance the industry contribution to GDP.”

  • Firms pay N308m fines, penalties to NAICOM

    Firms pay N308m fines, penalties to NAICOM

    •Commission receives N1.8b levies

    More than N308 million fines and penalties   imposed on  some insurance firms in 2012 by the regulatory authority, the National Insurance Commission (NAICOM’s ), have been paid, The Nation has learnt.

    The payment represents a 280.24 per  cent increase over the N81.3 million paid by  erring firms in 2011, going NAICOM’s Financial Statement for the year ended December 31, 2012.

    This increase in fines and penalties, however indicated that the firms have continued to flout the rules and regulations guiding the operations of insurance business as stated in the NAICOM Insurance Acts, 1997.

    NAICOM also received N1.8 billion insurance levies from the firms in the year under review.

    According to the Act, NAICOM  is entitled to charge one per cent insurance levy on every insurance institution. It charges an insurer or a reinsurer, one per cent based on its gross premium income, an insurance broker based on its gross commission and a loss adjuster, based on its gross fees.

    The Acts further provides that every sum payable by any insurer, reinsurer, insurance broker or loss adjuster under this Decree, shall be payable on or before  September 30 of each year.

    Meanwhile, there has been a decrease in the Commisssion’s Board and Executive Emolument in the year under review as against   the   figures obtained in the preceding.

    They received N61 million in salaries and allowances in 2012 lower than the N82 million in 2011. They also  received sitting, travel and other expenses of about N17 million as against the N26 million it spent in 2011.

    But staff salaries and allowances increased in 2012 to N53 million and N746 million respectively, as against  the N44 million and N590 million  recorded in 2011.

    On administrative expenses, NAICOM spent N5.6 million in 2012 on rent and rates as against N13.8 million spent in 2011; local travelling and hotel expenses gulped N61 million in 2012, against N47.4 previously.

    NAICOM spent N1.2 million on overseas travelling in 2012, while N7.8million  was spent in 2011.  N18.4 million went for bank charges in 2012, as against N2 million in 2011. Also N17.9 million  was spent in 2012 on security and other expenses, as against N15.2million in 2011.

    It also spent N10.4 million in 2012 against N4.5 million in 2011 on entertainment, while N27.4  million  went for software amortisation among others, N6.9 million was spent the previous year.

    Also, NAICOM said it would sanction market offenders.

    The Commissioner for Insurance, Fola Daniel, said it is the regulator’s wish not to impose any sanctions if there is compliance but if people will break rules or laws, then they should be ready to bear the consequences.

    He said they will not be excused from their offences and appropriate sanctions will be imposed on any insurance operator who runs afoul of any rule or regulation put in place for the smooth operations of the insurance industry.

  • NAICOM Steering Committee on Micro Insurance, Takaful to submit report soon

    Micro Insurance and Takaful Steering Committee set up by The National Insurance Commission (NAICOM) in December last year is set to submit their report to the Commission.

    Chairman of the committee and Director-General, Nigerian Insurers Association (NIA), Mr Sunday Thomas gave this hint while speaking with The Nation in Lagos.

    He said the committee had been working and would submit its report soon.

    He said the the committee’s primary responsibility was to make micro insurance successful.

    According to him, members of the committee were drawn from NAICOM, NIA, Central Bank of Nigeria (CBN), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), National Association of Micro Finance Banks, among others.

    He said the job assigned to them was significant, adding that they were conscious of the urgency of the assignment, and would do their best to meet the  expectations of the  NAICOM.

  • 30% of brokers fail to file returns to NAICOM

    30% of brokers fail to file returns to NAICOM

    BOUT 30 per cent of brokers have failed to file returns to the regulatory body, the National Insurance Commission (NAICOM).

    President, Nigerian Council of Registered Insurance Brokers (NCRIB), Ayodapo Shoderu, made this known at a meeting between the Commissioner for Insurance, Fola Daniel and council executives held at the council’s members evening hosted by Old Mutual Life Assurance Company Limited in Lagos.

    Shoderu said the commission  would not renew the licences of erring brokers.

    He warned brokers to be cautious and adhere to the regulations of the commission.

    He also said individuals seeking to establish insurance broking firms will henceforth have to scale more stringent hurdles before they can be admitted as members of the NCRIB.

    He stressed that the body will be more stringent in admission of new members to prevent infiltration of the broking world by opportunists who may want to borrow the garb of insurance brokers under whatever guise.

    He noted that whatever bad name the insurance industry has attained today could be said to have been caused by the activities of these unethical practitioners who are always set to dupe unsuspecting insurance clients, a trend which he says  must stop.

    He further disclosed that NAICOM has agreed to process this year’s renewals with 2012 accounts, as against the earlier position which stipulated that 2013 International Financial Reporting Standards (IFRS) compliant accounts should be used.

    He said the Commissioner for Insurance Fola Daniel agreed based on appeals by the council leadership.

    According to him, the commissioner was not happy with the number of companies that have so far submitted their 2013 accounts.

    Managing Director, Old Mutual Life Assurance Company Limited, Keith Alford, called for more collaboration between brokers and underwriters.

    He added that the job of taking the industry to lofty heights rests on both parties.

     

     

    He said his company seeks to be number one or two in the industry, adding that to achieve this, the company is focused on identifying the needs of Nigerians, creation of financial education, innovation and good customer service.

     

  • 20,000 agents unlicensed, says Olamerun

    20,000 agents unlicensed, says Olamerun

    NO fewer than 20,000 unlicensed agents transact business in the country, the new President, Association of Registered Insurance Agents of Nigeria (ARIAN), Mr. Gbadebo Olamerun, has said.

    He has therefore  called on insurers to ensure that their agents are licensed by the National Insurance Commission (NAICOM).

    Olamerun, who disclosed this at his investiture in Lagos, said his target along with other new executives is to register 20,000 agents at the end of 2015. The association currently has 3, 000 registered agents.

    His position is hinged on the belief that increasing the number of registered agents with NAICOM will increase premium collection which will lead to increase in insurance gross domestic product (GDP) contribution in the country.

    He said: “My vision is to make insurance agency business easy by collaborating with other stakeholders in and outside the industry, especially with state governments, NAICOM, NIA, CIIN, NCRIB etc to foster the deepening of insurance penetration in Nigeria. We will also collaborate with my constituency, the agents, in introducing interactive session with all insurance agents tagged: Members Evening Initiative (MEI), which will be a quarterly strategic session where agents will be hosted by one of the leading insurance companies.

    “This drive will afford all the major players in the industry opportunity to meet with the agents, increasing their capacities, give them a positive mind set and sense of belonging.

    “As we speak, we have 3,000 registered agents with NAICOM and we project that by 2015, we would have registered  20,000 agents into the books of ARIAN and NAICOM.”

    On the Market Developmental Restructuring Initiative (MDRI), he noted that the association will drive the project with a national holistic view of mobilising all insurance agents for its execution.

    Speaking further, he said his leadership will continuously equip its members on the skills needed to sell insurance business to the grassroot

    He said: “We will also ensure agents are certified by CIIN because we have been able to push for a reduction of the amount for the proficiency test certification which is the most expensive requirement for agent’s registration with NAICOM.

    ‘We also want to add value to agency network by recruiting more matured executives such as retired personnel and retrenched bank staff to market specific products such as annuity.

    “The era of commission only aided and abetted sharp practices among some agents which have affected the image of the insurance industry. However, ARIAN has set up a portal in its website to check the activities of members, relate with HR of each organisation, and collaborate with the insurance companies to reduce sharp practices to the barest minimum.”

    Chief Olusola   Dada of Anchoria Investment and Securities Ltd called on insurance companies to expand their networks to the rural areas, adding that most people in the rural areas are still very ignorant of the importance of insurance.

    He said that insurance is still very strange to the people in the rural areas, adding that with the issue of financial inclusion, insurance operators must go beyond what they are doing to boost insurance penetration in the country.

  • NAICOM okays four insurers’ 2013 accounts

    NAICOM okays four insurers’ 2013 accounts

    Four insurance firms have had their 2013 financial accounts approved by the National Insurance Commission (NAICOM) in the first quarter of 2014 as required by law.

    The four firms are Mansard Insurance Plc, Custodian General Insurance, Custodian Life Assurance Ltd and Cornerstone Insurance Plc.

    The commission disclosed this in a circular titled: “Submission Status of 2013 Financial Statements of Insurance Companies as at April 23, 2014.

    The early approvals is a departure from the past where insurers find it difficult to submit their true financials and get approval from the regulator as and when due.

    While Mansard Assurance Plc has already done its AGM, the other three are expected to do theirs soon.

    Meanwhile, the accounts of Zenith Life Insurance Limited; NSIA Insurance Limited; FBN Life Assurance Limited; Wapic Insurances Plc; Zenith Insurance Company Limited and Wapic Life Assurances are being reviewed.

  • Decentralise micro insurance, NAICOM urged

    Decentralise micro insurance, NAICOM urged

    The National Insurance Commission (NAICOM) has been asked to decentralise micro insurance business to deepen its penetration in the country.

    NAICOM’s Consultant Yomi Soladoye who gave the advice in Lagos said about seven groups have shown interest in obtaining the operating licence  following the release of micro insurance guidelines in November,  but that none  has actually done so.

    “Micro insurance has been taking place in this market for a long time with about 20 insurance firms underwriting the business. I expect an influx into the business from both operators and distributors.

    “What I see happening is that NAICOM is creating an enabler for the good work it has done that will instigate, encourage, or compel existing distributing channels which are the underwriters and new channels to come up and go into the business.

    He said NAICOM needs to decentralise the issue of N350 million, N200million, N150million into national, regional, local government and sole operation, adding, “if they accent to such an arrangement, then they will be able to create more awareness on the business to potential operators by advertising.

    For instance, if you are an existing insurance agent and have spent some number of years, and have N5million capital to operate micro insurance, you can operate in any part of Nigeria except a state capital, then people will be ready to go back to their village to do the business.”

    He said although the Commission has been working hard,, it needs to do more to achieve results.

    He praised the Commission for its achievements in micro insurance, noting that the effect would only be felt when operators and distributors are encouraged.

    He said the provisional minimum paid-up capital requirement of N150million for life micro insurance business, the N200million for general micro insurance business, and N350 million for composite micro insurance business should be decentralised into national, regional, local government and sole operation.

    He said: “Looking at the amount of investment and effort put in by NAICOM and the Deutsche Gesellschaftfür Internationale Zusammenarbeit (GIZ) of Germany to deepen insurance through micro insurance  compared to where we are now, I will say we have not attained the level we should reach.

    “Old Mutual, a foreign operator, is here and it should not do the business that AIICO, Leadway and others have been doing. In some other countries, when an investor from another country comes in, they are compelled to open a micro insurance branchfor every one branch in the city or after five years of operation, micro insurance should form  15 per cent of their portfolio,” he added.

  • NAICOM releases guidelines on commissions, rebates, refund premiums

    The National Insurance Commission (NAICOM) has released new guidelines to monitor charges on rebates, commissions, return and refund premiums.

    NAICOM’s new Deputy Commissioner, Technical, Mohammed Kari, who made this known in a circular to all insurance institutions in the country, said the guidelines are in line with the statutory powers of the Commission.

    On rebates and brokerage commissions, the circular, stated it shall be illegal for any insurance institutions to solicit, offer, or allow commissions and/or rebates in the transaction of insurance businesses except as provided by the extant insurance laws and guidelines.

    It said: “For the avoidance of doubt, Over-Riding Commission, Business Acquisition fees and other similar fees not provided for by the Nigerian Insurance Laws shall not be solicited, deducted, offered or paid in respect of any insurance transaction in Nigeria, warning that “an Insurer, who grants or receives a rebate, offers, demands, pays or receives commission contrary to Section 53(1)-(3) of the Insurance Act 2003, may in addition to the penalty prescribed by Sections 53(4) and 76 of the Insurance Act, 2003, shall be liable to other penalties as prescribed.”

    According to the guidelines, “each Insurer shall submit a quarterly return on the rebates, brokerage commission and other fees paid out, or payable on all its production during the preceding quarter to the Commission, not later than 14 days from the end of the quarter. The return shall be in accordance with the format prescribed in form ICR2.3a.

    “In addition to the provision of Section 41(1) of the Insurance Act, 2003, a Broker shall submit to the Commission a copy of his dedicated client account, duly stamped and signed by the bank and a quarterly return of the brokerage commission received, receivable or deducted at source, taxes paid and rebates received during the preceding quarter on all businesses not later than 14 days from the end of the quarter.

    On return or refund premium, NAICOM said: “For the avoidance of doubt and in line with Article 3(9) of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Regulation, 2013, no insurer, broker or its agents shall charge or receive premiums in excess of the actual premium on an insurance policy that may result in refunding the excess amount paid or with the intent of returning the excess in any form, by cash or otherwise to the insured, its agents or any party.”

  • ‘Africa’s untapped market offers prospects’

    ‘Africa’s untapped market offers prospects’

    • ‘Nigeria gets more attractive’

    Insurance groups based in Europe, the United States and South Africa are looking to emerging markets on the African continent in a hunt for better growth prospects because of the maturity of their own markets, where growth is more limited.

    This was made known in a report titled, “Africa’s Insurance markets: Gearing up for sustained growth,” by A.M Best.

    The report showed that the over 160 million population of Nigeria offers a huge opportunity to the foreign investors.

    According to A. M Best, Sub-Saharan Africa offers very strong growth potential but accounts for only 0.2 per cent of total global premiums written, adding that “as a result, insurance groups in Europe, the United States and South Africa have increasingly started looking to emerging markets on the continent in a hunt for better growth prospects because of the maturity of their own markets, where growth is more limited,” the report said.

    “There are a number of attractive markets for insurers in Africa to consider, including Kenya, Nigeria and Ghana. Kenya’s insurance sector has proved robust and resilient, despite there being many poor households. Premiums have been growing by double digits, fueled mainly by the non-life sector, which makes up 66.2 per cent of total premium written.

    “Nigeria has the continent’s largest population at 174 million, and premiums are expected to nearly quadruple in the next five years to N1 trillion (about $6.3 billion) from N260 billion in 2012, according to the National Insurance Commission of Nigeria (NAICOM), while in Ghana, the life market is estimated to be growing by 40 per cent annually.

    The report said economic growth is supported by oil and gas exploration, political stability and a regulatory system that makes it attractive for businesses, adding that many large international insurance groups from developed countries have historically had a presence on the continent.

    It listed Zurich, with key hub operations in Morocco and South Africa; AXA Group, with a strong presence in Francophone Africa (including Algeria, Cameroon, Gabon, Côte d’Ivoire, Morocco, Mauritius and Senegal); Allianz Group, with a growing presence in 10 African countries, including Ghana, and American International Group, with well-established units in Kenya and Uganda and local partners in most African countries, as some of the firms.

    However, they have become more aggressive in their strategies for expansion on the continent.

    “The report said that the strong foreign interest in Africa’s insurance markets began toward the end of the 20th century, when Munich Re, the world’s largest reinsurer, established regional offices in West and Central Africa to service its clients. Since then, some companies from mature economies have entered the market, by either following their clients to Africa, or through partnerships’ joint ventures, the acquisition of a stake in an existing insurer on the continent, or by acquiring a new business license directly.

    “A few of such interests include the the 2005 Sanlam Financial Services Group, owner of Santam, South Africa’s largest general insurer, acquisition of African Life Assurance Co. Limited.

    “The group owns significant stakes in insurers in Botswana, Namibia, Zambia, Malawi, Mozambique, Tanzania and Kenya. It was also stated in February 2014, that Sanlam acquired a stake in the Nigerian stock-exchange, and listed Oasis Insurance to penetrate the country’s growing general insurance sector.

    “In 2009, Germany’s Allianz Group, was approved for a license by Ghana’s National Insurance Commission (NIC) to operate in the non-life and life sectors, as well as in commenced operations. The company is taking advantage of the very strong growth and positive fundamentals in the country and has actively expanded its network in Africa.

    “In December 2013, the United Kingdom’s largest life insurer by market value, Prudential plc, acquired a majority stake in Accra-based Ghanaian insurer, Express Life from LeapFrog Investments, a venture capital firm and specialist investor in financial services in Africa and Asia. Despite Express Life’s relatively small size, the deal is considered significant given Prudential’s entry to the market and its vast resources.

    “In February this year, London-headquartered specialty insurer Catlin Group, said it was considering expanding into territories, including Indonesia, Thailand, and Africa. The firm currently has six underwriting hubs in the US, London, Canada, Bermuda, Europe and Asia Pacific,” the report added.

  • ILAN seeks NAICOM’s intervention in dispute with underwriters

    ILAN seeks NAICOM’s intervention in dispute with underwriters

    • NIA sets up Committee

     

    The Institute of Loss Adjusters of Nigeria (ILAN) has called on the Nigeria Insurers Association (NIA) and the National Insurance Commission (NAICOM) to intervene in its dispute with underwriters over the poor fees paid on their scale of service and issues of delayed payments.

    ILAN President, Chief Lebi Omoboyewa, who made the call in Lagos, said the dispute has remained unresolved for many years.

    He said there is urgent need for intervention by the Commissioner for Insurance, Mr. Fola Daniel to avoid unethical practice in the profession.

    He said: “Over the years, underwriters pay us poorly and in some other instances, delay our payment. This has been bothering us. Adjusters in Nigeria had an agreement with the underwriters over 50 years ago on scale of fees. Some few years back, we went back to NIA to let us agree on a new fee for our service by reviewing it upwards. This was in view of inflation which has rendered loss adjusters to operate below economic level.

    “Presently, quite a lot of adjusters have been frustrated out of service, whereas in the industry, the older you are, the more experienced you are supposed to be. But when this people are treated with indifference, they go away.

    “Quite a number of underwriters see adjusters as mere contractors forgetting that we are equally professionals like them before we branched into the specialised area of loss adjusting. We also play the balancer between them and the insuring public,” he said.

    Omoboyewa noted that the underwriters treat them like beggars after rendering service to them, adding that the institute has complained to the Commissioner, who rationalised the issue as a trade dispute.

    “We have complained to the commissioner who said it is a trade issue. But we believe that all arms of the industry, including loss adjusters, underwriters, brokers and agents are under NAICOM and if one arm is aggrieved, it is the duty of the Commission to seek audience with the two parties and find a way of resolving their problems.

    “We believe that there is no amount of money you spend on advertisement without maintaining a sound understanding and confidence between you and the insuring public, your money goes down the drain. It is the adjusters that can say what underwriters should pay to the satisfaction of the public.”

    Omoboyewa said despite the setback and the frustration on their members, the Institute has continued to ask the members to continue to obey the ethics of the profession.

    He wondered how long the loss adjusters can hold-on to this if proper things are not done.

    Reacting to the ILAN president’s claims, NIA Director-General, Mr. Sunday Thomas, said the association has set up a committee to look into the matter.

    He said the loss adjusters are paid based on percentage, irrespective of the claims figure.

    He said that as the amount of claims go up, the fee they are paid also increase, noting that insurers and other arms of the industry are all victims of low fee and rate in the industry.

    He said: “We are all victims and we have explained to the loss adjusters that we are partners in progress. A committee is already looking into the matter and if there is need for adjustment in the fee we pay to them, we will do it.

    “On the issue of delayed payment, we have told them to report any insurance company that has refused to pay them beyond the 90 days stipulated period. But none of them have filed any report with us.”