NAICOM gives govt 100 per cent pass mark on No Premium No Cover compliance

•        Says insurers make over $70m from NNPC account

Chuks Udo Okonta

The Government has complied 100 per cent with the No premium No Cover policy on insurance accounts, the Commissioner for Insurance Fola Daniel, has said. 

Daniel told Inspen that the biggest test of the No Premium No cover, was the Nigerian National Petroleum Corporation (NNPC) account, which generated over $70 million (N11.36 billion), and was paid before the renewal date.

He said: “On government accounts, I think there is 100 per cent compliance. The biggest test of the No Premium No cover was the NNPC account, which generated over N70 million dollars, and was paid promptly.

“The effective date for renewal of NNPC’s account was April 1 and the premium was paid on March 30. So I do not know of any government account where somebody will breach the law.” 

NAICOM had on January 1, warned that any underwriter that provides insurance cover without collecting the premium would be liable to a penalty of N500, 000 or lose its license.

The Commission noted that all insurance covers shall only be provided on a strict 'No Premium No Cover' basis. It maintained 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.

NAICOM 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 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 maintained that 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.