The National Insurance Commission (NAICOM) has released the guidelines for State Insurance Producer (SIP) policy programme in line with its mandate of enforcing compulsory insurance in states to deepen insurance penetration nationwide.
According to NAICOM Spokesman, Rasaq Salami, the guidelines, if implemented, will remarkably boost premium income generation and the sector’s contribution to the nation’s Gross Domestic Product (GDP).
The Commissioner for Insurance, Mohammed Kari, had announced in Ibadan last week that the policy was expected to take off on January 1, 2019.
From the new document, the 36 states and the Federal Capital Territory (FCT) will automatically become a new alternative insurance distribution channel in the country.
The SIP would be an agency of a state government but licensed by NAICOM to provide intermediary services as defined by the guideline issued by the commission. It would also be remunerated as by provision of the operational guideline.
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The SIP is expected to facilitate the sale of compulsory classes of insurance within the state jurisdiction and all classes for its principal’s insurances (state government), while additional insurance products and services would be considered in the future, depending on the success of the initial approach.
While it will also be empowered to penalise defaulters according to the laws of the states, the agency, he added, would equally maintain proper records of individuals and organisations bound by the requirements of the compulsory classes of insurance and monitoring the compliance.
He stated: “Once licensed to operate by the commission, the SIP shall enter into Memorandum of Understanding (MoU) as may be sanctioned by NAICOM, with approved insurance companies in its jurisdiction for the purposes of placement and management of insurance business within a state.
“The SIP shall only transact insurance business with approved insurers, saying only insurance companies with branch offices in respective states will be eligible to transact business with SIPs.”
To complement the SIP policy, he promised that NAICOM would open 20 new branch offices across the states of the federation for strict management and enhancement of insurance penetration.
This, he said, would also go a long way in meeting government expectations with regard to the Economic Recovery and Growth Plan (ERGP) in the areas of job creation, poverty prevention and confidence in the face of risk.
He disclosed that the initiative would be the answer to the saturation in the corporate segment, an opportunity to improve the image of insurance industry and brand building for individual insurance firms.
In a related development, a group has announced plans to unveil a platform known as Retail Insured Family Association of Nigeria (RIFAN) aimed at promoting retail insurance business in the country.
A statement by the Coordinator of RIFAN, Chief Ali Ugwu Theophilus, said the association will be unveiled on Thursday. According to him, the theme of the event is ‘Enhancing Insurance Confidence in Nigeria: The Role of Policyholders’, adding that the event will attract stakeholders from all sectors of the economy.
He noted that the body is an association of insurance policyholders registered under the Federal Government of Nigeria on June 28, 2017 as a Non-Profit Organisation and that the association is poised to assist the insurance industry in creating awareness; enhance public confidence on insurance by facilitating prompt settlement of claims and protecting the rights of policyholders who are members.