NAICOM to grant ‘State Insurance Producer’ licence
Industry regulator, the National Insurance Commission (NAICOM), in furtherance of its policy to diversify product distribution, has announced plans to grant states of the Federation what is called State Insurance Producer (SIP) licence.
The SIP will be an Agency of a state government licensed by NAICOM to provide intermediary services, and will be remunerated from the services they provide.
The operational guideline expected to be released today shall come into effect on January 1, 2019, Mohammed Kari, commissioner for insurance, made the disclosure weekend at the 2018 Educational Seminar of the Chartered Insurance Institute of Nigeria held in Ibadan, the Oyo State capital.
Kari said the key responsibilities of the SIP included facilitating the sale of the compulsory classes of insurance within the state jurisdiction and all classes for its principal’s insurances (State Government); additional insurance services and products would be considered in the future, depending on the success of the initial approach.
It will also exercise on defaulters the power to penalise them according to the laws of the State, while maintaining proper records of individuals and organisations bound by the requirements of the compulsory classes of insurance and monitoring the compliance.
“Once licensed to operate by the Commission, the SIP shall enter into a Memorandum of Understanding as may be sanctioned by NAICOM, with approved insurance companies in its jurisdiction for purposes of placement and management of insurance business within the state.”
“The SIP shall only transact insurance business with approved Insurers, and only insurance companies with branch offices in the respective states will be eligible to transact business with the SIPs.”
Kari stated that to complement the SIP policy, the Commission would be opening 20 new branch offices in states across the nation for strict management of the policy and the enhancement of insurance penetration.
“This, we believe, would also go a long way in meeting government expectations with regards to the Economic Recovery and Growth Plan (ERGP) in the areas of job creation, poverty prevention and condense in the face of risk.
‘It will also answer to the saturation in the corporate segment and also create opportunity to improve the image of the insurance industry, as well as brand building for individual insurance institutions,” said.
According to Kari, one major source of concern to the Commission, which equally hinders insurance penetration, is the lack of spread of insurance companies across the country. “The spatial distribution of insurers and intermediary activities are alarmingly skewed.
“Virtually all insurance companies are headquartered in Lagos with a few in Abuja, and this concentration is complemented by very poor branch network,” he said.