Tag: NAICOM

The National Insurance Commission (NAICOM) has expanded the number of insurance companies providing life insurance services in Nigeria to 14.

This follows the issuance of a life insurance license to CHI Life Assurance Limited at the Commission’s headquarters in Abuja yesterday.

A statement from NAICOM described the approval as part of its commitment to strengthening the insurance industry and fostering a more competitive market.

Speaking at the event, Commissioner for Insurance, Mr. Olusegun Ayo Omosehin, urged CHI Life Assurance to make meaningful contributions to the industry.

He assured the company of NAICOM’s commitment to creating an enabling environment for insurance operators, ensuring that businesses can thrive under a stable regulatory framework.

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Mr. Omosehin also stressed the importance of compliance with regulatory requirements. He advised CHI Life Assurance’s management to seek guidance from NAICOM whenever necessary to avoid lapses.

Addressing the Board of Directors, he stated that they must take their responsibilities seriously, as the Commission will hold them accountable for the company’s corporate governance and operational standards.

Also speaking at the event, Deputy Commissioner Technical, Dr. Usman Jankara, outlined key areas of focus for CHI Life Assurance. He urged the company to strictly adhere to regulatory rules, meet capital requirements to avoid sanctions, implement effective risk management strategies, and follow anti-money laundering guidelines.

He also called for fair market conduct, simplified claims settlement processes, and readiness for NAICOM’s routine inspections.

In response, the Managing Director of CHI Life Assurance, Mrs. Ose Oluyanwo, pledged full collaboration with NAICOM. She assured the Commission that the company would operate in line with regulatory laws and guidelines, contributing to the development of Nigeria’s insurance sector.

The statement from NAICOM added that this development is expected to enhance the industry’s stability and growth, reinforcing efforts to build a more competitive and reliable insurance market.

The National Insurance Commission (NAICOM) has initiated discussions with the World Bank to explore opportunities for collaboration aimed at addressing key challenges and driving growth in Nigeria’s insurance sector.

During a courtesy visit by the World Bank delegation, the Commissioner for Insurance, Mr. Olusegun Ayo Omosehin, identified the insufficient actuarial capacity within the Nigerian insurance industry as a major constraint. He noted that while NAICOM has commenced its automation process, several challenges remain in achieving full automation across its regulatory functions.

Omosehin pointed out the significance of the New Insurance Consolidated Bill to the World Bank team which he said has already been passed by the Nigerian Senate and is currently awaiting concurrence from the Federal House of Representatives.

He expressed confidence that once both chambers approve the bill, it will receive presidential assent, marking a significant step forward for the industry’s regulatory framework.

Addressing public skepticism towards insurance, the Commissioner acknowledged past concerns over non-payment of claims. To restore confidence, NAICOM has adopted a new operational mantra, “find a reason to settle claims,” which has reportedly led to increased compliance from industry players in claim settlements.

Omosehin also noted the Commission’s ongoing collaboration with the Nigeria Police Force and other relevant agencies to enforce compulsory insurance, an initiative that commenced on February 1, 2025. He stated that NAICOM has intensified public education efforts on the benefits of third-party insurance through various media platforms to enhance awareness and compliance.

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The Commissioner pledged NAICOM’s commitment to supporting President Bola Tinubu’s vision of achieving a $1 trillion economy.

Adding to this, NAICOM’s Deputy Commissioner for Technical Operations, Dr. Usman Jankara, outlined the Commission’s focus on operating within a value-driven framework that aligns with the needs and aspirations of Nigerians. He further disclosed plans to develop cyber insurance guidelines and engage industry stakeholders on implementation.

Mrs. Aisha Bashir, a senior official at NAICOM, spoke on the importance of microinsurance regulation, underscoring the Commission’s efforts to expand insurance access to low-income earners and rural communities.

Leading the World Bank delegation, Mr. Mehnas S. Safavian assured NAICOM that the bank would consider the Commission’s requests for technical assistance, particularly in areas such as capacity building, automation, and capital market development.

The National Insurance Commission (NAICOM) has lauded the announcement by the Nigeria Police Force that with effect from 1st February 2025, there will be a nationwide enforcement of the Third Party Motor Insurance for all vehicles on Nigerian roads. This move aims to ensure compliance with Section 68 of the Insurance   Act    2003.

Explaining the importance of the law and its implications for vehicle owners in the country, the Commissioner for Insurance, Segun Omosehin, in a statement, clarified that the Third Party Motor Insurance Policy gives the policyholders the limit of N3 million to repair or replace the property of the third party damaged during an accident.

Besides, he added that it also gives the policyholders access to limited medical care for any injured third party as a result of the accident.

Furthermore, the policy, he stated, provides financial compensation to the family of the deceased innocent third party in the event of death, noting that the Third Party Motor Insurance Policy now includes third-party motor insurance cover for the vehicle if the vehicle was driven to any West African country based on the protocol of the ECOWAS Brown Card Scheme.

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He pointed out that the Third Party Motor Insurance is the minimum coverage compulsorily required by law for any vehicle on our roads, while Comprehensive Motor Insurance is optional and recommended.

“The essence of every vehicle on the road having the Third Party Motor Insurance is to facilitate safety of others and ensure the financial recovery/compensation for damages and/or injuries or loss of lives in the event of accidents covered by the policy.

“It can be procured from or through only licensed insurance entities authorised by the National Insurance Commission to transact Motor Insurance business in Nigeria. It is sold for a premium of N15,000 per year to private car owners, while the premiums for commercial vehicles vary depending on the type of vehicles,” Omosehin said.

He further disclosed that a Complaints Bureau is also in place at the National Insurance Commission for resolving all complaints that may emanate from members of the public who may be dissatisfied by an insurance company’s service or response to claims.

Policyholders, turned victims of defunct insurance companies, are being denied reprieve of billions of naira claims by the regulatory authority, the National Insurance Commission (NAICOM).

This is despite the provisions of the Insurance Act of 2003, which provides that policyholders in such distressed companies should be paid their premiums by NAICOM.

The Act states that NAICOM should compensate uninsured’ or hit-and-run drivers and insured whose insurer suffers insolvency that leads to cancellation of certificate by the regulator.

So far, there are thousands of victims of defunct companies from UNIC Insurance whose licence was cancelled in 2021, Investment and Allied Insurance Company Limited in 2011; Spring Life in 2010; Express Insurance; SUN Insurance and Amicable Insurance, among others.

The most recent defunct companies are Niger Insurance Plc and Standard Alliance Insurance Plc, both of which licenses were cancelled by the National Insurance Commission (NAICOM) in June 2022.

The law says NAICOM as the regulator ought to provide reprieve to the victims of liquidated by paying their unpaid claims and maturity claims just like the Nigeria Deposit Insurance Corporation (NDIC) does, refunding savings of customers of defunct banks.

On the part of NAICOM, it has, over the years, failed to comply with its own law on settlement of aggrieved policyholders’ claims worth billions of naira. The exact amount cannot be ascertained as it has never been paid or reported by the commission.

Indeed, Section 78 of the Insurance Act of 2003 emphasisies security and development funds and the application of such fund to cater for instances of ‘uninsured’ or ‘unidentified’ drivers, insolvency of insurer, and cancellation of insurance company’s certificate.

In other words, Section 78 provides that the NAICOM should cater for policyholders whose insurer is insolvent or whose certificate was cancelled.

It specifically states: “Section 78 sub-section (1) the security and development fund established under the National Insurance Commission Act 1997 shall (a) be used for the payment of any claim admitted by or allowed against a registered insurer where such claim remains unpaid by reason of insolvency or cancellation of the registration of the insurer.

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 “Sub-section (b) states that it should be used to compensate innocent individual third parties permanently disabled or killed by uninsured or unidentified drivers.

 “Subsection (2) the proportion of compensation to be paid in respect of any claim, shall be determined by the Commission.”

Findings by The Nation, however, showed that NAICOM has deluded aggrieved policyholders this fact by keeping mum on this particular section of the Insurance Act.

The commission has rather unaware the populace of this provision of the Act.

The Nation found that the 53 existing insurance companies listed on the commission’s website have cumulative statutory deposits of about N40 billion kept with the Central Bank of Nigeria (CBN) out of which interest is earned.

Meanwhile, some industry chieftains have faulted the regulator on its failure to obey its own laws that puts the responsibility to cater for policyholders whose claims and investments are trapped in dead insurance companies at their doorstep.

Some of them who spoke under condition of anonymity affirmed that Nigerians, and indeed, policyholders are not aware of Section 78 and its benefits to them.

He said: “Yes, there is a pool of statutory deposit that NAICOM collect from insurance companies deposited with the CBN. This is because once you are an existing company; you are mandated to send 10 per cent of your money which is share capital to the CBN.

 “For example, some Life Companies have over N1 billion deposited with CBN while some general business have over N2 billion. So, you can imagine the volume of interest that NAICOM is earning and they don’t account to anybody.

 “This money is what they ought to use to compensate uninsured’ or hit-and-run drivers and insured whose insurer suffers insolvency that leads to cancellation of certificate by the regulator, NAICOM as stated in Section 78 of the Insurance Act. It is similar to how the NDIC pays customers of defunct banks. Unfortunately, people don’t know and NAICOM is not telling them so that they are aware of such provision.

Another top source added that the industry is quiet about using statutory deposit to pay unpaid claims because many insurance companies too don’t want to pay.

 “NAICOM is getting interest on the fund and this has been free money for them for decades.

 “I must say that yes, NAICOM has abandoned policyholders of defunct companies which is unfortunate,” he noted.

Another top source also affirmed that the commission is earning huge interest of the money from CBN without utilising it for its purposes.

Questions were sent to NAICOM spokesperson, Halil Abba since October 22, 2024 via text messages while calls were also made but they were all declined.

The Nation enquired from NAICOM on the total statutory fund of insurance companies with the CBN, who earns the interest yield, has NAICOM ever paid claims to policyholders of defunct companies such as Amicable, UNIC, and Spring Life, among others from the fund?

However, NAICOM is yet to respond to these posers as at press time.

The implementation of the Local Content Law by the National Insurance Commission (NAICOM) has unsettled the reinsurance sector of the insurance industry, The Nation has learnt.

The enforcement of the law is designed to prioritize domestic capacity in insurance and reinsurance placements before considering offshore placements, boosting competitiveness of local operators.

But top sources in the industry said the development has led to a hike in reinsurance premium leaving insurance companies meant to reinsurer their businesses and risks groaning.

The hike majorly occurred because the enforcement has reduced the number of reinsurers that insurers can purchase reinsurance from to only four.

However, speculations are rife that the enforcement process adopted by NAICOM favours a few reinsurers against others even as they allege partiality.

Reinsurance companies currently operating in the country are Continental Reinsurance Plc, FBS Reinsurance Ltd and Nigeria Reinsurance Corporation.

Aside from these locals, regional players such as Africa Re and WAICA Re dominate the market space holding a major chunk of the reinsurance market.

Besides, other foreign players, mostly European also take a chunk of reinsurance business from Nigeria.

Presently, the enforcement which is set to cut off not just foreign reinsurers from getting direct business from the country, will also cut off a West African or regional reinsurer like WAICA Reinsurance.

On the other hand, its competitor, Africa Re, another regional company is alleged to be favored. Sources said this is possible because NAICOM considers the fact that it has its headquarters in Lagos with a new branch in Abuja.

It was further gathered that top board members and managing directors of the affected reinsurance companies, especially those from the West African region are currently scrambling to see the commissioner for insurance to make case for their companies.

The Local Content Law was established by the Nigerian Content Development and Monitoring Board (NCDMB), came into effect on April 22, 2010. In the insurance capacity, NAICOM partnered with NCDMB and jointly issued Insurance Guideline in 2022 to ensure strict compliance and enforcement of the Nigerian Oil and Gas Industry Content Development, NOGICD Act to promote local content.

In a circular released this month by NAICOM with reference: NAICOM/18R/53/2024 and subject: Exhaustion/Utilization of Local Content Capacity Prior to Any Offshore/Overseas Insurance/Reinsurance Placement signed by the Director of Innovation and Regulation, Mr. A.J. Adamu, on behalf of the Commissioner for Insurance, Mr. Segun Omosehin, NAICOM stated that practices in the industry undermine local content regulations, depriving Nigerian insurers and reinsurers of opportunities.

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The Commission emphasized that such violations go against statutory requirements and regulatory guidelines, hence its reinforcement against foreign reinsurers.

NAICOM said: “All insurance and reinsurance businesses must fully utilize the capacity of local Nigerian insurers and reinsurers before considering offshore placements. Companies must not engage with foreign insurers or reinsurers without prior consultation and approval from NAICOM. Violations will attract strict penalties.

“The Commission maintains sole discretion to determine which regulated entities can participate in reinsurance activities, including oversight of required Financial Strength Ratings for foreign reinsurers. Violators will face severe sanctions and other regulatory consequences. NAICOM has reaffirmed its zero-tolerance stance on breaches of local content laws. Companies seeking to place insurance or reinsurance business offshore must obtain express approval from NAICOM to ensure alignment with local content requirements.”

Speaking on the development, an insurer who spoke on condition of anonymity lamented that the recent enforcement on local content by the Commission is done with favourism and partiality.

While he lauded the initiative to enforce the law, noting that it has been long overdue, he cautioned that there is need to carry it out carefully.

He questioned why WAICA Re is affected on the grounds that it is regional when Africa Re is also a regional company.

He said: “WAICA Re is about to lose majority of its business which is mainly from Nigeria while Africa Re is excluded on the grounds that it has its headquarters in Lagos and another in Abuja. Hence the enforcement does not affect them.

“Some of us are surprised by the fact that WAICA Re is affected and Africa Re is not. I also found out that this enforcement is in favour of FBS Re and Continental Re. But what this means for us as insurers is that we are constrained to majorly reinsurer with these three companies. Although, there is Nigeria Reinsurance option, FBS Re, Continental Re and Africa Re dominate the market space the most.

“Our dilemma in all of this is that the premium rate has been hiked due to the limited options available to us which can trickle down to hike in premium charge on the insured,” he noted.

Another CEO who spoke on how the enforcement is affecting his company said: “The Local Content Law is being enforced and it is a welcome development. This means that we must exhaust local content before we can reinsurer outside Nigeria which is good.

“But cutting off a company like WAICA Re on the basis that it is not a Nigerian company and therefore cannot participate in businesses anymore isn’t too good. It limits our options of reinsurers. Many insurance companies reinsure with WAICA Re and that is why 50 per cent of their income comes from this market.

“They are giving Africa Re opportunity to participate because they claim a Nigerian is a shareholder. Meanwhile, WAICA Re also has a Nigerian shareholder. Some of us think that it is just a business strategy to displace some and favour others,” he said.

In a telephone conversation with NAICOM spokesperson, denied allegation of favouritism.

He said all reinsurers are treated equally and without prejudice.

He assured that every enforcement process by the Commission is fair, transparent, and non-discriminatory.