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Chuks Udo Okonta
The National Insurance Commission (NAICOM) has said only 300 insurance broking firms have valid licences to operate.
The names of the firms qualified to broker insurance business are published on the website of the commission.
The Commission in December 2015, published the names of 108 insurance brokers for their failure to meet the regulatory requirements, especially, failure to renew their licenses.
It was learnt that majority of the erring firms were sanctioned for violating certain provisions of the insurance law, such as; late submission of their returns to the regulatory body, while some did not even submit returns for several years, non-renewal of operating licence, among other offenses.
When their names were made public then, the commission said the affected firms would not be allowed to renew their operating licences, while those who are still interested to continue operating in insurance industry would be asked to apply for a fresh licence.
The commission, through a circular, said, an insurance broker whose licence has lapsed and wishes to re-register under the same name should submit a Letter of Appeal giving reasons why the last licence lapsed and payment of non-refundable fee (N250,000.00) for processing of the appeal.
Moreover, it charged the intending broker to equally submit Application for Re-registration, if appeal is sustained by the commission, adding that such interested broker must pay a payment of application fee of N250,000, submit Certified True Copy of CAC’s Forms C02 and C07, Evidence of payments of the fee and payment of all outstanding ISS levies due before the license lapsed.
Other requirements listed in the circular include: Nomination of qualified CEO and Executive Management for NAICOM’s approval; Submission of a Management Account/Statement of Account as at the last day of last month of the period since the last approved account and apply for NAICOM’s approval of the Members of the Board of Directors.
NAICOM pointed out that there would be re-registration Inspection of Broker to determine non-violation of the Insurance Act and payment of penalties for identified violations/non-compliance, while the interested broker is to attend and be successful at the re-registration interview.
According to the commission, interested brokers are requested to submit; Professional Indemnity, Sworn Declarations, Other Declarations, Tax Clearance for the expired period of license, Certificate on Oath from the External Auditors and Payment of License Fee of N2,250,000.00, after which the licence would be issued to those that fulfill all the listed requirements.
To remain in business, the embattled brokers where enjoined to urgently embrace merger to enable them take advantage of the opportunities provided by the commission.
An insurance analyst, who is also a lawyer said this in an interview with Inspenonline. The expert posited that the best option opened to the affected brokers, is for like minds to come together and use their expertise to form bigger broking firms.
The analyst urged the brokers to maximize the sharing scheme, put their resources together to surmount the enormous demands confronting brokers.
“I have always believed merge and acquisition is the way forward for brokers. The affected brokers should take advantage of sharing scheme. Those who are good in marine underwriting should unite with others that are good in oil and gas; aviation; and other business classes to form bigger firms for which they would be respected.
“Brokers should learnt to swallow their pride, they should come together, harness their resources and let go their ego of being want to be address as Managing Directors.
The public would respect a firm made up of competent professionals who can handle risks from classes,” the expert said.
The analyst maintained that going forward, insurance broking practice would be tough as demands arising from International Financial Reporting Standard (IFRS), regulators and insurance law may force small players out of business.
According to the expert, the passage of the consolidated insurance bill into an Act, would affect the Nigerian Council of Registered insurance Brokers (NCRIB) Act, stressing that it is high time brokers began to consider merger and acquisition to enable them remain afoot.