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Chuks Udo Okonta
The National Insurance Commission (NAICOM) has said its decision to grant permission to conventional insurance companies to operate microinsurance window operations, was because licensed microinsurers are not sufficient to cover even a fraction of the low income earners in nigeria
The spokesperson of NAICOM, Rasaaq Salami, who disclosed this in an interview with Inspenonline, noted that: “Looking at the percentage of Nigerians within the low income bracket I.e over 75 per cent coupled with the pandemic that has affected more middle income earners who also have dropped to the low income level our best bet is letting the big and viable operators transact microinsurance.
“The new operators remember are only four with two state to operate in Lagos, one unit operator in sagamu and CHI national but only life.
“These companies are not sufficient to cover even a fraction of the low income earners in nigeria. This is the best time to open the market if we must achieve the desired objectives of financial inclusion and insurance penetration.”
NAICOM had earlier announced its decision to permit microinsurance window operations for conventional insurance companies in Nigeria with effect from December 1.
NAICOM’s decision was contained in a circular to all insurance institutions in Nigeria, with number NAICOM/DPR/CIR/32/2020 dated Nov. 30, 2020 and signed by Director, Policy and Regulation, Mr Leo Aka, on behalf of the Commissioner.
The commission said the move was part of the ongoing pursuit to support financial inclusion and increase insurance penetration in the country.
NAICOM posited that a conventional insurance company must meet some requirements before being granted a window operation.
“The insurer shall seek and obtain approval of the commission to transact microinsurance business, and its board must approve the establishment of a microinsurance department.
“Applicants shall apply for Window Microinsurance National Operation License and the department shall be headed by an experienced insurance officer not below the rank of an Assistant General Manager (AGM).
“The officer must possess a minimum of seven years post-Associate of Chartered Insurance Institute of Nigeria qualification or a minimum of 10 years working experience in a technical department of an insurance institution, “ it said.
NAICOM maintained that any window operator shall segregate the financial records of its microinsurance business from that of the conventional business and put in place appropriate reinsurance arrangement