NAICOM targets compulsory policies in new State Insurance Producer licence
Insurance regulator, the National Insurance Commission (NAICOM), has released the guidelines for State Insurance Producer licensing (SIP) and operations, with focus on exploring the different compulsory insurances.
NAICOM in a guidelines issued on Monday, said, “The National Insurance Commission pursuant to the powers conferred on it by the provisions of Section 49(1) of National Insurance Commission Act 1997 hereby issue the following guidelines for licensing and operations of an Insurance agency to be known as State Insurance Producer.
“The State Insurance Producer shall enter into a memorandum of understanding; as may be approved by the Commission; with approved insurance companies established in its jurisdiction for the purpose of placement and management of insurance business”.
According to the Commission, a SIP shall maintain a separate insurance unit or department for proper monitoring of the activities of the agency with the Insurance Officer reporting directly to the CEO of the licensed agency.
As contained in the guidelines, the key responsibilities of SIP include “enforcement of compulsory classes of Insurance within the state’s jurisdiction by ensuring compliance and exercising on defaulters the power to penalise them according to the state laws.’’
Mohammed Kari, commissioner for Insurance/CEO of NAICOM, said SIP was a fresh alternative channel for insurance distribution newly developed by the commission and to become effective on January 1, 2019.
The SIP, according to Kari, is developed to ensure effective distribution of compulsory insurances, thereby deepening insurance penetration in the country.
He believes that the SIP will increase market penetration by 300 percent in two years, if effectively executed.
Once licensed, the commission said the SIP would enter into a memorandum of understanding (MoU) with NAICOM and the approved insurance companies.
“A licence issued under this guideline shall entitle the holder to act as a State Insurance Producer for the appropriate state government and shall be renewable once every two years by the Commission,” he said.