NAICOM Grants Conventional Insurers Approval For Microinsurance Window Operation

By LOVETH AZODO. Lagos

The National Insurance Commission (NAICOM) has said that Conventional Insurance companies can now commence Micro Insurance window operations, as part of its Financial Inclusion and deepening insurance penetration drive in the country.

NAICOM disclosed this in a circular with number ‘NAICOM/DPR/CIR/32/2020 titled “Circular On Microinsurance Window Operations For Insurance Companies In Nigeria.”

“The Circular Stated, “As part of the ongoing pursuit to support Financial Inclusion and increase penetration in Nigeria, the Commission hereby permits Microinsurance window operations for conventional insurance companies. Henceforth, in order for a window operation to be granted to a conventional insurance company, the following requirements shall be met.”

“The Insurer shall seek and obtain approval of the commission to transact Microinsurance business.”

“Board resolution approving the establishment of a microinsurance department”

“Applicant shall apply for window microinsuarnce department.”

“The department shall be headed by an experienced insurance officer not below the rank of an AGM, who must possess a minimum of 7 years post associate of Chartered Insurance Institute of Nigeria qualification or a minimum of 10 years working experience in a technical department of an insurance institution

“Any window operator shall segregate the financial records of its Microinsurance business from that of the conventional business.”

“Appropriate reinsurance arrangement shall be put in place,” it stated.

It would be recalled that the National Insurance Commission in 2018 released a set of guidelines for micro insurance operation in Nigeria.

The regulator classified the operators into three categories – unit (local), state and national operators in order to ensure a more extensive reach among the population, especially at the grassroots level,

The minimum capital base for micro insurance operators was pegged at N15m for life operators at the unit level and N25m for general business operators.

For operators at the national level, N200m and N400m minimum capital bases were fixed for life and general business respectively.

According to the guidelines, the maximum sum insured for any policy being underwritten by the micro-insurance operators was pegged at N2m while time limit for payment of fully documented claims was 48 hours.