State Insurance Producer Policy: NCRIB, TPL may take NAICOM To Court
The leadership and members of the Nigeria Council of Registered Insurance Brokers (NCRI), the umbrella body of insurance brokers in Nigeria, are not happy with the recent guidelines released by the National Insurance Commission (NAICOM) establishing the State Insurance Producer (SIP), saying the guideline is challenging the existence of broking business in Nigeria.
To this end, Insurance brokers and Transparent Protection Ltd./Gte (TPL) a Non-Governmental Organisation (NGO) working for the promotion of insurance culture in Nigeria, have resolved to challenge NAICOM on its proposed State Insurance Producer (SIP) policy.
It should be recalled that the National Insurance Commission (NAICOM) had in October released the guidelines for State Insurance Producer (SIP) with operational licence of the business which is expected to commence January 1, 2019 pegged at N2 million.
The brokers, under the umbrella of the Nigerian Council of Registered Insurance Brokers (NCRIB), and the NGO have served the commission a 30-day pre-action notice while the brokers have engaged the service of a legal firm to fight this course.
President, NCRIB, Shola Tinubu, while speaking at NCRIB’s December Members’ Evening in Yaba, Lagos, jettisoned the whole idea behind SIP describing it as a massive threat to broking business especially as 70 per cent of brokers businesses come from government, an aspect that SIP is intended to serve.
Shola said in view of the situation the Council has appointed a Legal firm consisting of three Senior Advocates of Nigeria (SAN) that would be engaging NAICOM on their behalf.
“Our lawyers have already served NAICOM notice, and in view of this notice, we can have dialogue. This is to protect the interest and businesses of insurance brokers.”
“If the policy is allowed to take effect it would create crisis in insurance broking profession as well as insurance industry. The brokers will resist any action that will allow non-professional government corporate entity to hijack 70 per cent of brokers’ business. The legal case would ensure that the issue is pursued to a logical conclusion.
He said the Council will continue to engage NAICOM on the matter using alternative dispute resolution approach just as he said that a meeting has been scheduled between NAICOM and all the CEOs of broking firms in Nigeria on the matter on ground.
Meanwhile, a grouped called Transparent Protection Ltd./Gte (TPL) has indicated its intention to challenge NAICOM in Court over its recent Guidelines by which it sought to create Corporate Insurance Agents in the various States of the Federation.
According to the Programme Director, TPL, Godson Ibekwe-Umelo, the body is a pro-active, rights-based non-governmental organisation working for the promotion of insurance culture in Nigeria.
TPL, he said, believes that in making the guidelines which are billed to come into effect on January 1, 2019, the regulatory body acted in excess of its powers as enshrined in the National Insurance Commission Act 1997 and Insurance Act, 2003.
NAICOM had simplified the payment process of the licensing fee by allowing the SIP pay from the first commission earned, a step taken to free state governments from financial burden in getting the licence.
NAICOM, in the guidelines, stated that there will be a signed undertaking by an officer of the State Government not below the rank of a Permanent Secretary that the state undertakes and agree that the sum N2 million be deducted from accrued commission to be earned by the Licensed State Insurance Producer before payment of commission is made to the coffers of the Government.
The Commissioner for Insurance, Mohammed Kari, had earlier said, SIP business model will bring about 200 to 300 per cent insurance penetration in two years. He said the initiative will increase the revenue base of state governments and insurance profits.
Highlighting more on the benefits accruable from the SIP initiative, he maintained that it would help to meet the government’s expectations with regards to Economic Recovery and Growth Plan (ERGP) in the area of job creation, poverty prevention and confidence in the face of risks.
However, some brokers who spoke with this medium on the matter under the condition of anonymity complained bitterly on the SIP Policy saying if allow will not augur well with broking business in the country.
“This is a calculative attempt to kill the broking business in this country. It is better we all rise in unison against the policy otherwise, if we allow it, we will have ourselves to blame.”
Effort to get NAICOM representative comment on this matter before publication proved abortive as the telephone number of the Commissioner for Insurance, Muhammed Kari was busy.
