IT is an open secret that operators of the insurance industry in this country are engaged in cut throat competition in the industry, and to outdo each other, they resort to offering commission, rebates, rate -cutting to secure business.
Despite this malpractices, it appears the National Insurance Commission (NAICOM) is yet to discipline any insurance company or practitioner caught in the act almost one year after the commission threatened to draw out the sledgehammer on culprits.
Specifically, the commission had in a circular to insurance companies in 2014 stated that "It shall be illegal for any insurance institution to solicit, offer or allow commissions and/or rebates in the transaction of insurance businesses except as provided by the extant insurance laws and guidelines."
Besides, the commission also warned that any insurer who grants or receives a rebate, offer, demand, pay or receive commission shall be made to pay penalty as prescribed by the Insurance law.
Also, NAICOM further directed that every insurer is required to submit a quarterly return on the rebates, brokerage commission and other fees paid out or payable on all its production during the preceding quarter to the commission, not later than 14 days from the end of the quarter.
Every broker, the circular said, is required to submit to the commission a copy of his dedicated client account, duly stamped and signed by the bank and a quarterly return of the brokerage commission received, receivable or deducted at source, taxes paid and rebates received during the preceding quarter.
NAICOM further directed that no insurer, broker or its agents shall charge or receive premium in excess of the actual premium on an insurance policy that may result in refunding the excess amount paid thereafter.
The commission said maintained that any insurance institution that failed to comply with the content of the circular shall be penalized in line with relevant provisions of the Insurance Act 2003, the NAICOM Act 1997, regulations, guidelines and such other penalties as may be prescribed by the commission from time to time.
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