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The National Insurance Commission (NAICOM) said it has received applications from people seeking operational licences to operate as web aggregators.
The Head, Corporate Communications and Market Development, National Insurance Commission, ‘Rasaaq ‘Salami, told Inspenonline that the commission had received applications and that they are being looked into by the licensing department.
NAICOM had pegged the minimum share capital of a web aggregator at N5 million and registration fee, N3 million.
A web aggregator is an insurance intermediary or an insurance company that provides information on insurance provided by different companies.
A web aggregator also provides a comparison of insurance products and also the prices of different insurance products. The aggregator provides information on different products to various insurers.
The web aggregator concept is developed when end consumers get quotes on the prices of different financial products. The aggregator either maintains a website or owns a website to provide information on the insurance products. For regulating these companies, an Insurance Web Aggregator Licence is required.
A web aggregator plays the following roles: Compares insurance products.
Agreements are made between web aggregators and insurers. All relevant information related to insurance products has to be provided and information related to insurance products is displayed on the website.
Having an Insurance Web Aggregator Licence would not permit a web aggregator to provide ranking and comparison of different insurance providers and their products.
Web aggregators can display only insurance products. Solicitation of policies is allowed by web aggregators.
Solicitation is done through an online portal where information would be directly provided to the customer.
According to NAICOM, a web aggregator is expected to have a minimum share capital not less than N5 miliion as at the date of application and shall continue to maintain same throughout the license period, even as the web aggregator shall submit to the commission, a financial position duly certified by an External Auditor every year after finalisation of books of accounts.
The insurance regulator had equally pegged web aggregator’s registration for license at N3 million.
Intending investor is to pay N500,000 non-refundable application fee, after which such investor will pay N2.5 million as licensing fees, even as license renewal will cost N1million.
Stating that Insurance levy payable by web aggregator shall be one per cent of the gross commission income or minimum of N200, 000, whichever is higher, it added that the commission to be paid by the insurer partner to Web Aggregator shall not exceed 30 per cent of the brokers commission as stated in Section 53 of the Insurance Act, 2003.
“A Web Aggregators shall put in place a robust LMS and transmit leads at no extra cost to the insurers. The insurer shall keep adequate records of commission paid to a Web Aggregator,” it pointed out.
On payment of premium under web Aggregation, operation, it said, shall be guided by Section 50(1) of the Insurance Act 2003 which provides for receipt of an insurance premium as condition precedent to a valid contract of insurance and highlighted further that there shall be no cover in respect of an insurance risk, unless the premium is paid in advance i.e. ‘No premium, No cover.’
The operational guidelines is to serve as a working document to register, supervise and monitor web aggregators.
The commission in the guideline said insurance intermediary who maintain a website for providing information on products of different Insurers is covered by the guideline.
It stated that it is the responsibility of web aggregators to obtain any clarification required on the applicability of this Guidelines, and any other Regulations from the commission.