NAICOM to harmer brokers on overriding commission infractions

From left: Chairman of African Insurance Brokers Association, Dr Feyisayo Soyewo, President of the Nigerian Council of Registered Insurance Brokers (NCRIB), Ayodapo Shoderu (2nd left) presenting a plaque to Apostle Hayford Alile at the End of Year Lecture and Awards by the Lagos Area Committee of the NCRIB in Lagos. With them is the Chairman of the Area Committee, Patrick Ikponmwosa.  

Chuks Udo Okonta

 The National Insurance Commission (NAICOM) has threatened to come down heavily on any broker who would henceforth engage in collection of overriding commission.

Overriding commission is an amount paid to a ceding company in addition to the acquisition cost to compensate for overhead expenses.

The President Nigerian Council of Registered Insurance Brokers (NCRIB), Ayodapo Shoderu, disclosed this today Thursday at the 10th annual general meeting and end of year lecture of the Lagos Area Committee of the NCRIB in Lagos.

He noted that the NAICOM condemned the act unequivocally and advised brokers to refrain from the act.

He said NAICOM also called on brokers to continually upscale their professional skills and adhere to the rules on no premium no cover. He added that the commission urged operators to report any form of infringement noticed, especially from underwriters.

He said: “Notably, the Commission, has called on the NCRIB to urgently address these issues: The illegality of Overriding Commission being collected by many Brokers. The Commission threatened that it would come down heavily on any Broker who continued with the nauseating practice which has slowed down the pace of growth of the industry.

“The Commission condemned this act unequivocally and advised our members to refrain from this act. If the statutory Brokerage income due to members is becoming inadequate, we could begin the process of a review.

“The need for Brokers to continually upscale their professional skills. Since the worth of any professional is his/ her ability to display some measure of expertise and extensive knowledge in his chosen field, our members need to continually appraise themselves about contemporary developments in the industry and beyond.

“On no premium no cover, members are advised to continually adhere to the rules and that any form of infringement noticed, especially from Underwriters should be reported promptly to the Commission.”

He said brokers were warned to be strictly professional in the discharge of their duties.