The National Insurance Commission (NAICOM) has released guidelines for the operations, business conduct and obligations of State Insurance Producer (SIP), a new insurance agency it has newly developed.
The Chief Executive Officer of NAICOM, Alhaji Mohammed Kari, unveiled the guidelines in Abuja.
Kari, who is also the Commissioner for Insurance (CFI), said the new guidelines would align the activities of SIPs.
” In pursuant to the powers conferred on it by section 49(1) of NAICOM 1997 Act,, the commission hereby issues guidelines for licensing and the operations of an insurance agency, known as State Insurance Producer ( SIP),’’ he said.
SIP is a fresh alternative channel for insurance distribution newly developed by commission and to become effective on Jan.1, 2019.
The SIP, according to the commission, was developed to ensure effective distribution of compulsory insurances, thereby deepening insurance penetration in the country.
According to the guidelines, a SIP shall maintain a separate insurance unit for proper monitoring with the insurer reporting directly to the CEO of the licensed agency.
The commission’s guidelines also mandated the SIP to only transact insurance business with the approved insurers whose list would be approved from time to time by the commission.
According to the guidelines, the key responsibilities of SIP include “enforcement of compulsory classes of Insurance within the state’s jurisdiction by ensuring compliance and exercising on defaulters the power to penalise them according to the state laws.’’
Once licensed, the commission said the SIP would enter into a Memorandum of Understanding (MOU) with NAICOM and the approved insurance companies.
The guidelines said insurance companies must operate within the SIP’s jurisdiction for the purposes of placement and management of insurance business.
The commission further announced a licensing and registration fee for SIP of N2 million while the renewal few of N1million is applicable every two years.
On payment of premium for insurance businesses , the guidelines stipulated that “businesses conducted will be subject to the provisions of Section 50 (1) of Insurance Act 2003 (No-Premium, No-Cover).
“Also the businesses will be subjected to the various guidelines issued by the commission where appropriate and premium payment shall be made directly to the Insurer or Lead Insurer as the case may be.’’