Digitalisation: NAICOM Introduces Web Aggregators As Insurance Distributors, Releases Operational Guidelines

By LOVETH AZODO, Lagos

As part of its digitalisation plan to aid to deepen insurance penetration in the country, the National Insurance Commission (NAICOM) has introduced web aggregators for wide distribution of insurance products.

Insurance web aggregators serve as insurance intermediary who maintains a website for providing information on products of different insurers.

The Commission stated this in an operational guidelines titled “The Web Aggregators” released on Wednessday.

According to NAICOM, the guidline will serve as a working document to register, supervise and monitor web aggregators as insurance intermediary who maintains a website for providing information on products of different insurers.

The Commission also pegged the minimum share capital of a web aggregator at N5 million and registration fee, N3 million.

The web aggregator is expected to have a minimum share capital not less than N5 miliion as at the date of application and shall continue to maintain same throughout the license period, even as the Web Aggregator shall submit to the commission, a financial position duly certified by an External Auditor every year after finalisation of books of Accounts.

Intending investor is to pay N500,000 non-refundable application fee, after which such investor will pay N2.5 million as licensing fees, even as license renewal will cost N1million.

Stating that Insurance levy payable by Web Aggregator shall be one per cent of the gross commission income or minimum of N200, 000, whichever is higher, it added that the commission to be paid by the insurer partner to Web Aggregator shall not exceed 30 per cent of the brokers commission as stated in Section 53 of the Insurance Act, 2003.
“A Web Aggregators shall put in place a robust LMS and transmit leads at no extra cost to the insurers. The insurer shall keep adequate records of commission paid to a Web Aggregator,” it pointed out.

On payment of premium under web Aggregation, operation, it said, shall be guided by Section 50(1) of the Insurance Act 2003 which provides for receipt of an insurance premium as condition precedent to a valid contract of insurance and highlighted further that there shall be no cover in respect of an insurance risk, unless the premium is paid in advance i.e. ‘No premium, No cover.’

The operational guidelines is to serve as a working document to register, supervise and monitor web aggregators.

The commission in the guideline said that insurance intermediary who maintain a website for providing information on products of different Insurers is covered by this guideline.

It stated that it is the responsibility of Web Aggregators to obtain any clarification required on the applicability of this Guidelines, and any other Regulations from the commission.