Insurance branch operations put on alert over tightening regulation

Before now, the branch operations of insurance companies had no pressure of regulation and compliance. Today, the situation has changed as the industry regulator, the National Insurance Commission (NAICOM), beams its searchlight on their activities.

In addition, NAICOM is monitoring branch operations to ensure compliance with the different regulations with the view to ensuring the protection of policy holders and the investing public.

Specifically, an ongoing supervision of branch operations by NAICOM is targeting compliance with anti-money laundering and terrorism financing guidelines which requires that companies know their customers details before providing them with cover.

Another important concern of the officers checking the books were the level of compliance with “No Premium No Cover” policy of the Commission which requires that an insurer must collect premium in advance before providing cover on a particular risk.

For the Chartered Insurance Institute of Nigeria (CIIN), the time has come when branch managers must regularly align with industry regulations and acquire the right knowledge to avoid running foul of the law.

At the 2013 Annual Education Seminar organised by the Chartered Insurance Institute of Nigeria (CIIN) with the theme “Regulatory Reforms: Role of Branch Offices” which took place in Ilorin, Kwara State, stakeholders identified the need to prepare branch managers and officers in line with tightening regulations in the industry.

According to them, even at the global level regulations are changing and now requires that every segment of the insurance companies operations understand the ‘Do’s and Don’ts, to avoid sanctions and penalties on their companies.

Fola Daniel, commission for insurance, said it has therefore became imperative that the Commission beamed its searchlight and take a deeper look at the activities of branch offices of insurance firms across the nation. “The Commission’s inspectors are right now on the field inspecting the books of insurance companies at branch level; checking for compliance with relevant insurance laws, regulations and operational guidelines.”

Fatai Kayode Lawal, president, CIIN said the focus on branch offices underscores the growing need for improving compliance level across all sections of the operational base of the Industry.

Lawal stated that this singular desires underscores the effort of the Institute on continuous human capital development, assuring of the Governing Council’s efforts to continually reinvigorate the parameters for continuous professional development of members.

Sam Onyeka, assistant director, NAICOM who presented a paper at the seminar titled “Regulatory Reforms: Role of Branch Offices,” said the ongoing regulatory reform initiative in the insurance sector is a necessary fall-out of the recent global economic crises. “The reforms will continue for the time being and the natural outcomes will be continuous introduction of complex rules and regulations by the regulator.”

Onyeka noted therefore that branch offices are critical for attaining overall regulatory compliance by individual insurance companies. “In our assessment, many branch offices are less than properly staffed and equipped and such ill-equipped branch offices are not ready to play the required role which is to aid the head office in attaining regulatory compliance.

“We advocate that branch offices should become more proactive. Staff at the branch levels should be both qualified and competent to implement compliance responsibilities,” he stated.