Insurance

NAICOM eyes 2020 for takeoff of new brokers’ licence renewal regime

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Chuks Udo Okonta

If things worked as planned, the National Insurance Commission (NAICOM) would next year, 2020 commenced the implementation of new regime for renewal of insurance brokers licence.

The Acting Commissioner for Insurance, Sunday Thomas, who disclosed this at the Chartered Insurance Institute of Nigeria (CIIN) 2019 insurance professionals’ forum, which held last week in Abeokuta, Ogun State, noted that initiative would strengthen the broking business.

He maintained that brokers are very important in the insurance business value chain, hence, the need to reposition the sector.

In the new licence renewal regime, NAICOM had proposed N5 million and N3 million licensing fees for insurance broking business, as against the present fee of N2.5 million.

The insurance regulator in a draft guideline for the regulation of insurance brokers in Nigeria, issued in June 2018 to all insurance broking companies, stated that in the proposed regime, brokers would operate 2-tier mode – Corporate and Partnership.

NAICOM noted that investors seeking Corporate licence have to pay non refundable application fee of N500,000 and those for Partnership licence N300,000, adding that every insurance broker shall upon successful conclusion of the registration process but prior to issuance of a licence, pay a licensing fee of N4.5 million for Corporate and N2.7 million, which together with the application fee amounts to N5 million and N3 million respectively.

NAICOM posited that every insurance broker shall pay bi-annual licence renewal fees of N1 million for Corporate and N600,000 for Partnership, adding that Corporate brokers would maintain a professional indemnity cover of not less than N10 million, which is N100 million in the case of oil and gas insurance brokerage or 50 per centum of its annual brokerage income for the preceding year, whichever is the greater, whilst partnership operators will a professional indemnity cover of not less than N5 million, which is N50 million in case of oil and gas insurance brokerage or 50 per centum of its annual brokerage income for the preceding year, whichever is the greater.

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