By Rosemary Onuoha

THE National Insurance Commission, NAICOM, has threatened to sanction insurance companies and brokers engaged in insurance businesses without sufficient information on the business insured.

NAICOM

The insurance regulator issued this warning in a circular titled, ‘Adequacy of data for underwriting purposes’.

The Commission stated:    “As part of the responsibilities of the Commission to establish standards for the conduct of insurance business in Nigeria it has become essential to dissuade operators from practices that do not entrench qualitative underwriting.

“The Commission has observed that many insurance institutions have continued to participate in insurance business placement / underwriting without first obtaining sufficient data / information on the proposed subject matter of insurance. This seems to be more prevalent in the offering of group life insurance cover, where names and identity of all persons assured are not established in line with sound insurance principles.

“Consequently, from the date of this circular, no insurer/ broker shall participate in any insurance placement/ underwriting without first obtaining adequate and sufficient information, data on the proposed subject matter of insurance which would include but not limited to names and relevant data on the property or lives assured as well as specified benefits in which premium is computed.

“No insurer shall entertain claims that might have occurred in a period before the data of payment of premium. Any failure to comply with this directive will attract appropriate sanctions,” NAICOM said.

Reacting to the development, Executive Secretary of the Nigerian Council of Registered Insurance Brokers, NCRIB, Mr. Fatai Adegbenro, said that the Council is working hard to improve on self regulation for brokers to minimize sanctions by the regulator.