The Insurance firm apex regulatory body, National Insurance Commission (NAICOM) has disclosed that comes January 2019, a new insurance distribution channel guidelines known as the State Insurance Producers (SIP) will be released to the stakeholders.
The Commission said this is in furtherance of its policy to diversify insurance distribution in Nigeria.
Disclosing this at the 2018 education seminar organised by the Chartered Insurance Institute of Nigeria (CIIN) in Ibadan, Oyo State, the Commissioner for Insurance, Mohammed Kari, said the SIP, would serve as an alternative channel for insurance distribution.
“The SIP will be an agency of a state government licenced by NAICOM to provide intermediary services as defined by the guideline issued by the commission and also remunerated as by the provisions of the operational guideline.
“The operational guideline has already been concluded and shall come into effect on January 01, 2019,” he stated.
Kari, listed the key responsibilities of the SIP as facilitating the sale of the compulsory classes of insurance within the state jurisdiction and all classes for its principal’s insurances (state government);
He said additional insurance services and product would be considered in the future, depending on the success of the initial approach.
He also said it will help in exercising on defaulters, the powers to penalise them according to the laws of the states, maintaining proper records of individuals and organisations bound by the requirements of the compulsory classes of insurance and monitoring the compliance.
“Once licenced 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.”
He said the SIP shall only transact insurance business with approved Insurers, noting that only insurance companies with branch offices in the respective states would be eligible to transact business with the SIPs.
Kari, said to complement the SIP policy, the commission would open 20 new branch offices in states across the country, for strict management of the policy and the enhancement of insurance penetration.
He said the commission, believes this would also go a long way in meeting government expectations with regards the economic recovery and growth Plan (ERGP) in the areas of job creation, poverty prevention and confidence in the face of risk.
He said it would also answer to the saturation in the corporate segment, provide opportunity to improve the image of the insurance industry, create brand building for individual insurance institutions as insurance plays a pivotal role in financial inclusion because it reduces the poverty line.
Kari, further said the SIP, would help people to manage their risk and protect them from any negative adverse effect of any unforeseeable circumstances as well as increase access to other financial services.
He said in order to deepen insurance penetration, the commission has two main objectives which are: Focused insurance awareness campaign for the financially excluded, promoting the development of products and business models that meet the needs of the financially excluded group.
He said this was why the commission has been supporting a number of awareness drives, which included the much publicised Insurance Industry Rebranding campaign, an initiative of the Insurers’ committee.
The commission has also thrown its weight behind the organisers of the first Insurance Industry and Consumer Nite; a platform that provides an opportunity for the sector to interface with the entertainment industry.
This, it believes would enhance the awareness level of insurance and its acceptability to another strata of the society.
“The youth in this case. The desire to promote the development of products that meets the needs of the financially excluded prompted the commission into introducing micro-insurance; a business line for the low income segment and Takaful Insurance – an alternative Risk Management Mechanisms that is Sharia compliant into the market to further boost insurance penetration.
“The introduction of Bancassurance in collaboration with the Central Bank of Nigeria (CBN), leveraging the wide spread of banks in Nigeria is also an initiative aimed at increasing access to insurance products and enhancing penetration.
“This is being extended to cover the microfinance banks and their consumers. The commission would continue expanding the distribution channel to ensure the excluded becomes the included”, he stated.