Insurance

NAICOM to sanction insurers over local content infraction

CFI/NAICOM boss, Mohammed Kari

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Chuks Udo Okonta

The National Insurance Commission (NAICOM) has threatened to sanction insurance operators that contravene local content policy by ceding businesses offshore, without fully utilising local capacities.

The commission in a circular entitled: Utilisation of In-Country Capacities of Nigerian Insurers, Reinsurers and Pool Prior to Foreign Facultative Reinsurance, dated December 22, 2016 and signed by Director, Authourisation and Policy, NAICOM, Pius Agboola, which was sent to all all insurance institutions, noted that it has observed that insurance practitioners now fail, neglect or refuse to consider and fully utilise relevant in-country capacities of insurance/reinsurance institutions such as; pools, reinsurers and other approved local/recognised insurance capacities prior to applying for approval to cede certain proportion of some risks offshore.

It maintained that in some situations where the pools, insurers, or reinsurers are offered participation, the institutions either offered minimal proportion below their capacity or informally restricted and/or compelled to accept lower than their respective capacities for the purpose of justifying cession of the risks offshore.

NAICOM noted that the unethical practice which contravenes the local content law, henceforth, would not be tolerated

It also cautioned operators who it said have inappropriately arrogated to themselves the authority to unilaterally exclude some insurers in juice businesses over alleged outstanding claims, urging them to desist from such act and report alleged non-settlement of claims to the statutory grievance/complaint redress mechanism for appropriate action.

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