From Ngozi Onyeakusi, Lagos
National Insurance Commission (NAICOM) has given an ultimatum to insurance firms in Nigeria operating microinsurance business through window to separate the business and get a fresh license within the next 18 months.
According to the commission, conventional insurance firms offering non-life Microinsurance products should wind up their operations within 18 months while those with life classes should not later than 24 months.
Such firms should obtain a fresh license to float microinsurance as a subsidiary of the firm. “Existing Conventional microinsurers shall wind down their window operations for non-life classes within 18 months from the effective date of this Guidelines and in not later than 24 months transfer the life classes to a dedicated microinsurance company.” “No policy shall be renewed nor new one issued with an expiry date beyond the date stated above”.
The Commissioner for Insurance, Muhammed who gave the ultimatum at a seminar for insurance journalists in Benin, the Edo State capital said the order was contained in a revised microinsurance guideline released by the commission recently.
The commissioner who was represented by the deputy commissioner, Technical, Mr. Sunday Thomas, disclosed that the microinsurance guideline was issued to enhance penetration of insurance especially in the rural areas.
He noted that the aim of the revived microinsurance guidelines was equally to ensure that all Nigerians are fully covered and understands the importance of insurance in economic development.
The commissioner pointed out that commission has the needed capacity to supervise these firms coming up, as there are plans by the commission to float more branches and recruit new staff across the country to have a closer monitoring of not only these microinsurance outfits, but also the conventional insurance companies.
Microinsurance products are designed for the low income market, low valued policies, micro and small scale enterprises in relation to cost, terms, coverage, and delivery mechanism. He pointed out that the regulatory body is already receiving application from investors.