NAICOM meets operators on implementation of No Premium No Cover policy

Chuks Udo Okonta

The National Insurance Commission (NAICOM) has commenced meetings with insurance operators to examine progress and challenges observed in the implementation of the No Premium No Cover regime, Inspen can reveal.

It was learnt that the Commissioner for Insurance and NAICOM's helmsman Fola Daniel, met the umbralla body of underwriters - Nigerian Insurers Association (NIA) during their council meetings few weeks back to ascertain the challenges and progress made since the policy took effect on January 1, this year.

A source in NIA, said issues on implementation of the policy dominated discussions at the meeting, adding that the underwriters, used the avenue to delibrate with NAICOM on the challenges they envisaged and agreed on how to tackle them.

It was also gathered that NAICOM will next week, meet members of the Nigerian Council of Registered Insurance Brokers (NCRIB).

President NCRIB Mrs Laide Osijo, speaking on the meeting, said it would provide opportunity for brokers to share observed challenges with the Commissioner and seek ways to ensure smooth implementation of the policy.

She said: "The Commissioner has been with the NIA and he will be with us next week. At the meeting, we would tell him the challenges we have being going through."

NAICOM had early in the year, issued a circular stating that from January 1, any underwritering firm that provides insurance cover without collecting the premium would be liable to a penalty of N500, 000 or lose its license.

It also noted that all insurance covers shall only be provided on a strict 'no premium no cover' basis and that only cover for which payment has been received, directly by the insurer or indirectly through a duly licensed insurance broker, shall be recognised as income in the books of the insurer.

The commission said any insurer, who grants cover without having premium in advance or premium receipt notification from the relevant insurance broker, shall be liable to a penalty of N500, 000 in respect of each cover so granted , and in addition, may be a ground for suspension of of the license of the insurer.

It said irrespective of period of insurance, insurers shall ensure that at any point, they have received directly or indirectly, through the insurance broker the full premium in advance for cover being granted.

NAICOM noted that all brokers should within 48 hours of receiving premiums on behalf of any insurer, notify the insurer in writing in each case, of the receipt of such premium, adding that all such notification shall be accompanied by the broker's credit notes, acknowledging indebtedness to the insurer.

It said said upon the receipt of such credit notes, the insurer shall issue cover and forward the policy documents along with the related debt notes to the broker.

It said any broker who fails to notify the insurer of any premium received on his behalf shall be liable to a penalty that is not less than N250,000 in each case of failure to notify.

NAICOM mandated insurers to notify it, not later that 30 days from the end of every quarter, of all premiums acknowledged as having been received by brokers or lead insurers, but not remitted to them, adding that any insurer who fails to render such return, shall be liable to a penalty of N5000 for each day of default.

Insurers and brokers were asked to reconcile their accounts not later than March 31, 2013 and brokers and lead insurers are to notify the commission of premium received and unremitted to insurers, not later than 30 days from the end of every quarter.