From Edet Udoh, Lagos
The Commissioner for Insurance, Mohammed Kari, has said that the withdrawal and cancellation of the State Insurance Producer (SIP) policy is not the end of the initiative.
Kari, who disclosed this during an open forum at the just concluded 2019 National Insurance Conference in Abuja, noted that the initiative was one of the elements in the Market Development and Restructuring Initiatives (MDRI), the commission wanted to leverage to deepen insurance penetration.
According to him, the commission having examined the rate of increase of the industry’s premium income observed that there is hardly any other best alternative to enhance the premium and deepen penetration than partnering the state governments in the distribution of insurance products.
He said the initiative, would have helped take insurance to states where there is no insurance presence at the moment, adding that insurance operators in a bid to secure businesses in states where the initiative operates would have opened their branches in such states as the guidelines only permits insurers in such states to insurance business accruing from SIP.
Kari told brokers that the commission would not relent in ensuring that there are multiple channels of distributions of insurance products, stressing that narrow channels have continue to clogged the spread of insurance products.
The Hon. Treasurer, Nigerian Council of Registered Insurance Brokers (NCRIB) Mrs. Ekeoma Ezeibe, who was wary of the new step being conceived by the regulator, cautioned the leadership of NAICOM on the new move, stressing that the commission should be careful not to open wrong doors that would pose as problem to the entire industry, in a bid to expand the market,
She also called for collaboration between the commission and brokers to ensure the new move works in favour of all stakeholders.
NAICOM had on December 20, 2018, announced the withdrawal and cancelation of the SIP. The insurance industry regulator stated this in a circular signed for the Commissioner for Insurance, by the Director, Policy and Regulation, Agboola Pius, entitled, Withdrawal of circular on State Insurance Producer Operational Guidelines, with reference number, NAICOM/DPR/CIR/20/2018 December 20, 2018 and sent to all insurance institutions.
The circular reads: Pursuant to the powers conferred by the enabling laws, the Commission hereby withdraws and cancels the Circular dated November 19, 2018 with reference number NAICOM/DPR/CIR/17 /2018 and titled “Operational Guidelines on State Insurance Producer”.
NAICOM had earlier released the SIP guidelines, which it planned to commence January 1, 2019 and pegged the operational licence at N2 million.
NAICOM simplified the payment process of the licensing fee by allowing the SIP pay from the first commission earned, a step taken to free state governments from financial burden in getting the licence.
NAICOM, in the guidelines, stated that there will be a signed undertaking by an officer of the State Government not below the rank of a Permanent Secretary that the state undertakes and agree that the sum N2 million be deducted from accrued commission to be earned by the Licensed State Insurance Producer before payment of commission is made to the coffers of the Government.
Kari, had earlier said, SIP business model will bring about 200 to 300 per cent insurance penetration in two years, adding that the initiative will increase the revenue base of state governments and insurance profits.