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Chuks Udo Okonta
The National Insurance Commission (NAICOM) is presently looking at the capital structure of micro insurance business and the areas it can be more functional in providing services to the public, the Commissioner for Insurance, Sunday Thomas, has said.
He said this today during an interview on Channels Television, adding that NAICOM hopes to lay a strong framework to aid operators.
“We are looking at the capital structure of micro insurance business and the areas we can be more functional in providing micro insurance services to the public. For us as a regulator, we are to lay the framework and allow operators to operate freely in that area.
“If there is anytime micro insurance is relevant to our economy, no other time than now. Those that are low in the pyramid need to be catered for, we have the structured guideline which we structured two years ago. Due to time we are now, we are rigging the timelines for micro insurance in times of authorization of operators and the process by which the consumers at that lower end will be able to enjoy the benefit of insurance,” posited.
Thomas noted that what the country had gone through in the last two months showed that insurance is crucial to businesses, life and the maintenance workforce and also commended operators for their initiatives for policyholders, stressing that: “It is important that we bear each other body at this time. Of cause for some of this operators, we want to thank them for taking the initiative, but much more than mention, there are other initiatives, by assisting the states, by helping them to provide the needed cover for their frontline workers that will leverage the existing compulsory group life cover as contained the Pension Reform Act 2014.”
On what the insurance sector is doing to support agric business, he affirmed that agriculture had remained the mainstay and “the more we dig deep into providing necessary services that will support government initiative in agriculture, the more we will be able to reap the benefit of the comparative advantage that we have in this area.
“To a large extent, we have continued to encourage operators to grant necessary protection of our agric sector. We have been working with NIRSAL, we had a lot of training with operators that we had done in the past, we are still doing and much more than that, we encourage operators to go into the end to end in agriculture, provide the necessary cover, the comfort when they are busy venturing into different areas of Agriculture.”
Thomas speaking on efforts to deepen penetration of the insurance market, posited: “I think largely in a challenging times like this people should appreciate the place of insurance in managing the assets that are exiting. Of cause in time of abundant, people can easily replace assets which they had lost. If there is anytime insurance can grow, it is now.
“You can imagine if any company can put in place as rider to a property insurance, what you call business interruption, all this that happen during this lockdown, the inability to go to work, lost of profit will have been taken care of by insurance, and of cause again looking at the life bit of it, what insurance sector have done by providing cover for frontline by assisting the federal government is also part of the things that will help the economy gain quick restoration.”
NAICOM had stipulated in the revised microinsurance guidelines that micro insurance business should be classified into Unit, State and National License.
It noted that National Insurer, such composite microinsurance operator is expected to be capitalised to the tune of N600 million, while N400 million minimum capital base is needed from a General microinsurance operators and N200 million for a Life microinsurer. According to the guideline, national operators are allowed to have presence in at least six states within the three geopolitical zones of the federation.
For a State Microinsurer, the minimum capital base is pegged at NI00 million, while a Unit Microinsurer investor must be capitalised to the tune of N40 million, with operation in one location within a local community.