The State Insurance Producer (SIP) Policy an initiative by the National Insurance Commission, NAICOM, which aims at deepening insurance in the country has finally gone into coma.
The Nigerian Council of Registered Insurance Brokers (NCRIB), and other interest groups who viewed the policy as capable of kicking them out of prominence recently warned they would approach the court to see it did not fly.
Responding to the seeming threat NAICOM held a town hall meeting with the NCRIB, where the issue was trashed out and the eventual outcome was the announcement that the SIP has gone to sleep.
NAICOM who conveyed the withdrawal/cancellation message in a circular with reference number, NAICOM/DPR/CIR/20/2018, dated December 20, 2018, signed by the Director, Policy and Regulation, Agboola Pius, for the Commissioner for Insurance, entitled, “Withdrawal of circular on State Insurance Producer Operational Guidelines,” to all insurance institutions, said the withdrawal and cancellation takes immediate effect.
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.
The Commissioner for Insurance, Mohammed Kari, had earlier said, SIP business model will bring about 200 to 300 per cent insurance penetration in two years and that the initiative will also increase the revenue base of state governments and insurance profits.
Highlighting more on the benefits accruable from the SIP initiative, he maintained that it would help to meet the government’s expectations with regards to Economic Recovery and Growth Plan (ERGP) in the area of job creation, poverty prevention and confidence in the face of risks.
Oriental News Nigeria reports that the President, NCRIB, Shola Tinubu, had last week said the body had served the NAICOM a 30-day pre-action notice to challenge the policy in court, adding that the body had also engaged the services of a legal firm to fight the course.
According to him, the said SIP is a massive threat to broking business, especially, as 70 per cent of brokers businesses come from government, an aspect that SIP is intended to serve.
“In view of this, we have appointed a Legal firm consisting of three Senior Advocates of Nigeria(SAN) and would be engaging NAICOM on our behalf. Our lawyers have already served NAICOM, and in view of this notice, we can have dialogue. This is to protect the interest and businesses of insurance brokers,” he said.
If the policy is allowed to take effect, he said, it would create crisis in insurance broking profession as well as insurance industry, noting that, the brokers will resist any action that will allow non-professionals hijack 70 per cent of brokers’ business. The legal case, he pointed out, would ensure that the issue is pursued to a logical conclusion.
Meanwhile, the President of the Nigerian Council of Registered Insurance Brokers, Mr Shola Tinubu has commended the Commissioner for Insurance, Alhaji Mohammed Kari for setting aside the policy, describing the Commission as a listening regulatory body who has again demonstrated the desire to grow an industry that would contribute meaningfully to the Nation’seconomic growth.
Mr Tinubu, in a statement, made available noted that the gesture would further enhance the Council’s confifldence in the leadership of NAICOM, stressing that the confidence reposed in NAICOM was never betrayed.
According to him, “the Council appreciates NAICOM for the magnanimity in withdrawing the guideline as it will lead to the much desired progress and cohesion required for the industry’s growth”
“We are back on drawing board to chat a way forward in deepening insurance penetration and entrenchment of MDRI among Nigerian populace to ensure more financial inclusion and make insurance a front burner in growing the nation’s economy as it is obtainable in other climes”
“It is pertinent to note that the current leadership of NAICOM has over the years demonstrated unprecedented understanding and all inclusive regulatory system whereby the Council has always been carried along in formulation of policies and guidelines before it eventually become operational.
“May I use this opportunity to salute the Commissioner’s courage and magnanimity in listening to the Brokers”.