By Yinka Bolarinwa
IN the last few weeks we had been talking about market development and restructuring initiative. We also talked about the role of the industry’s regulator, the National Insurance Commission (NAICOM).

In pursuit of its mandate as set out in the Nigerian Insurance Act 2003, and in a renewed attempt to reinvigorate insurance use, practice and regulations, NAICOM has fixed the end of March 2011 as the cut-off date from when all compulsory insurance policies, under various Nigerian statutes, will be fully enforced and penalties applied to defaulters.

It may surprise many of our readers that there still are millions of Nigerians who do not know about NAICOM at all, or very little about it. This week, I will therefore educate us on NAICOM and the role it is mandated to play in growing the insurance industry, and by extension, the Nigerian economy.

Role of NAICOM

The Commission was established by National Insurance Commission Act No. 1 of 1997 to ensure the effective administration, supervision, regulation and control of insurance business in Nigeria.  The Commission thus derives its powers from both the National Insurance Commission Act, and the Insurance Act 2003.  The functions of the Commission include:establish standards for the conduct of insurance business in Nigeria;

• approve rates of insurance premiums to be paid in respect of all classes of insurance business;

• approve rates of commissions to be paid in respect of all classes of insurance business;

• ensure adequate protection of strategic Government assets and other properties;

• regulate transactions between insurers and reinsurers in Nigeria and those outside Nigeria;

• act as adviser to the Federal Government on all insurance related matters;

• approve standards, conditions and warranties applicable to all insurance business;

• protect insurance policy – holders and beneficiaries and third parties to insurance contracts;

• publish, for sale and distribution to the public, annual reports and statistics on the insurance industry;

• liaise with and advise Federal Ministries, extra ministerial departments, statutory bodies and other Government agencies on all matters relating to insurance contained in any technical agreements to which Nigeria is a signatory;

contribute to the educational programmes of the Chartered Insurance Institute of Nigeria and the West African Insurance Institute, and

carry out such other activities connected or incidental to its other functions under the 1997 Act.

The Commission registers and grants licences to insurance firms, agents, brokers, and loss adjusters. Its inspectorate unit carries out routine and special investigations of operators to ensure they operate according to provisions of the law and other relevant regulation and policy guidelines. In breaches of the law and insolvency, NAICOM has powers to suspend an operator, withdraw licence, take over management, or liquidate the firm.

More on the role of NAICOM next week.