Microinsurance: NAICOM beams light on promoters, moves to stop ‘hot money’

Daniel

Chuks Udo Okonta

To ensure that illicit funds are not used to float micro-insurance companies, the National Insurance Commission (NAICOM) has scheduled a meeting with the promoters to know who they are, and consider whether they are fit and proper persons.

Inspen learnt that the meeting would enable the commission ascertain the genuineness of the funds and ensure the process of registering the firms does not contravene Anti-Money Laundering and Combat of Financing of Terrorism Control rules.

Deputy Director Authorisation and Policy, NAICOM, Leo Akah, said unlike in the past when approvals were granted on a one-off basis, the current process would be thorough to ensure that only ‘fit and proper persons’ get the micro-insurance licence .

He noted that the commission had concluded plans to commence what he described as staged approval for those that have applied.

He explained that the inability of some of the companies that applied for the micro insurance license to develop products that would meet the requirements of the policy was a major for the delay in getting approval.

Akah said for any company to get approval, its products must be simple, affordable and valuable.

He added that it was ironic that most people who applied for licence still saw micro-insurance from the point of view of conventional insurance adding that the commission would ensure that all the strict guidelines in the policy would be complied with before approvals.

 “We have a list of the requirements for registering either as full-fledged or as a window operation and the commission will within the first few weeks in the month of April be releasing the stages of approval to the general public.

“We have many applications and where the problems lie is the products, because being a new line of business; most people are still looking at micro insurance with the eye of a conventional insurance.

“Every micro insurance product must be simple, valuable and affordable in nature. And not until we see and are convinced, any product that is being presented and does not meet these requirements, we would be reluctant to approve their products.

“As I speak to you, nobody has been registered to carry out micro-insurance business in Nigeria. We have 10 applications and we will be meeting with the promoters to know who they are, and we want to know whether they are fit and proper persons. This process is not going to be a one-off thing,” he said.

Commissioner for Insurance Fola Daniel, has vowed to screen local and foreign funds to be invested in the industry to ensure they do not contravene the Money Laundering Act. He said the commission would also forestall developments where individuals with questionable funds hijack the industry.

“All investors will be screened no matter where they are coming from. Anyone bringing in capital would be screened to ensure the money is not derived from criminal activity, but brought to do business. The country has put in place a mechanism for sifting potential investors,” he said.