The inability of National Insurance Commission (NAICOM) and Nigerian Insurers Association (NIA) to reach a compromise on certain issues has been identified as reasons for the delay of the industry’s business procurement guideline, which was drafted to correct problems associated with rating.
It was learnt that the guideline which was submitted to NAICOM in 2016 for regulatory enforcement has not been activated because the commission and the proponents are still sorting out grey areas which may inhibit its smooth running when it is implemented.
According to the Chairman NIA, Eddie Efekoha, the template, when approved, will correct the issue of rating so that people who did not get involved in products of risks at the beginning, cannot smuggle themselves in only at the time of placement.
Citing an example of how the industry can adequately price risks, the NIA chairman said. “To do that, a broker will obtain quotes from insurance companies. And if the quotes are good enough, they are sent to a prospective client. Again, if the client says ‘I am okay with it,’ he or she will then empower the broker to place the business.”
He went on to say that, “Once the broker gets that mandate; he goes back to those insurance companies that provided the quotes in the first instance to do the necessary placements. And we are saying that if you have not participated in that process, you cannot wake up to participate in the placement.
“With that, everybody will quote and quote rightly. That way, we will know the exact loss experience of a given policy and not quote blindly, because what we do most time is blind quoting.”