The Federal Government has issued 18 months ultimatum to 17 insurance companies selling microinsurance products to acquire fresh microinsurance licence or suspend the selling of these products, LEADERSHIP can now reveal.
The government, which gave this deadline through its agency, the National Insurance Commission(NAICOM), added that, in a case any of the concerned insurance firms fail to acquire fresh licence, those with non-life Microinsurance products should wind up their operations, within 18 months while those with life classes should not later than 24 months. These conventional insurers, it was learnt, are to hand over their Microinsurance assets to dedicated Microinsurance company within this period.
To this end, investigation revealed that any of the 17 insurers who wish to float a Microinsurance subsidiary should therefore transfer its Microinsurance window operations to this subsidiary. And if not interested in floating a subsidiary, such underwriters are to handover their Microinsurance assets to registered Microinsurance outfits in the country.
NAICOM, in section 10, sub section 1 and 2 of the revised Microinsurance guidelines released recently to the public said: "Existing Conventional microinsurers shall wind down their window operations for non-life classes within 18 months from the effective date of this Guidelines and in not later than 24 months transfer the life classes to a dedicated microinsurance company."
It added that, "no policy shall be renewed nor new one issued with an expiry date beyond the date stated above."
By this directive, LEADERSHIP investigations revealed that non-life conventional insurers operating Microinsurance as a window operation are given till June 2018 to wind up this operation while the life operators has December 2018 as the deadline to do same.
LEADERSHIP investigation further revealed that; Royal Exchange Plc, Linkage Assurance Plc, Niger Insurance Plc, African Alliance Plc, Anchor Insurance Company Limited, Mutual Benefits Assurance Plc, AIICO Insurance Plc, among others 10 conventional insurers are to commence the process of either getting fresh microinsurance licences or transfer its microinsurance assets to existing microinsurance outfits.
This directive, it was learnt, is currently unsettling the insurance industry, but the insurance industry regulator said the move was not to hurt any operator, but to deepen insurance penetration and acceptance in the grassroots.
Speaking at a seminar organised for Insurance correspondents by NAICOM in Benin, Edo State at the weekend, the Commissioner for Insurance, Alhaji Mohammed Kari, said, the categorisation and low capital base were meant to ensure influx of investors in this new microinsurance landscape, while allowing the conventional insurers to concentrate on their core business, thus, leaving microinsurance operation to these new outfits.
Kari, who spoke through his deputy commissioner for Insurance, Technical, Mr. Sunday Thomas, added that the regulator has the needed capacity to supervise these firms coming up, as there are plans by the commission to float more branches and recruit new staff across the country to have a closer monitoring of not only these microinsurance outfits, but also the conventional insurance companies.
He said the new arrangement will ensure that innovative Microinsurance products are designed for the low income market, low valued policies, micro and small scale enterprises in relation to cost, terms, coverage, and delivery mechanism.
He pointed out that the regulatory body is already receiving application from investors in a bid to deepen the insurance penetration, especially, in the grassroots, adding that, the contribution of the insurance industry to the Gross Domestic Products (GDP) will improve significantly as a result of this development.
While delivering his presentation on 'Expanding the frontiers for Insurance Market Development and Penetration in Nigeria: The NAICOM Initiatives' at the seminar, the Acting Director, Research, Statistics & Corporate Strategy, NAICOM, Mr. Habila Amos, disclosed that the commission has given approval to 17 insurance companies at microinsurance window operation, noting that , the regulatory body will soon launch the second phase of the Market Development and Restructuring Initiatives(MDRI), all in a bid to increasing insurance acceptance, penetration and increase the profitability of the participating underwriting firms in the country.
Speaking earlier in an exclusive interview with LEADERSHIP at the weekend, the executive secretary, Nigerian Council of Registered Insurance Brokers (NCRIB), Mr. Fatai Adegbenro, said since insurance brokers are acting as a viable intermediary, there would be no need to apply for fresh microinsurance licences, especially, since some brokers are already selling microninsurance products of insurance companies.
He did not rule out the fact that some brokers might want to buy stake in some of these microinsurance outfits by the time they come on board, but that, there is a percentage of shareholdings they can have in insurance companies, including microinsurance outfits.
Meanwhile, the chairman-in-Council, Association of Registered Insurance Agents of Nigeria (ARIAN), Mr. Gbadebo Olameru, said the agents hope to collectively examine the recently released revised guideline on microinsurance and determine how to maximize opportunities therein.
The guideline, he said, is one of the best legacies of NAICOM has done for the industry, adding that the guideline has provided a platform for professionals to contribute more to the industry, whilst encouraging professionals to take advantage of the initiative to better their lots and increase insurance penetration in the country.
On his part, the managing director, Lancelot Ventures Limited, Mr. Adebayo Adeleke, urged professionals to leverage the guideline to deepen insurance at the grassroots, while cautioning the would-be microinsurance operators to avoid mistakes made by some microfinance operators, who left their core area of business to operate like conventional banks.