There are indications that the National Insurance Commission (NAICOM) would review the cancelled State Insurance Policy (SIP) policy in a bid to enhance insurance penetration in the 36 states of the federation and the Federal Capital Territory (FCT).
It was reliably gathered that the commission is worried about low insurance adoption in some states of the federation, as state governments were not putting into consideration the need to insure their assets, as well as to have group life insurance cover for their workers, against hazard in the course of duties.
It seems the regulatory body has realized the need to have a policy in place, similar to SIP policy, to persuade state governors to insure their buildings, as well as other government assets and lives of their workers.
Already, only one state- Kaduna and the FCT, have group life insurance coverage for their workers, as the remaining 35 states shun the noble insurance plan. Also, Kaduna, Lagos, Ogun and two other states, according to findings, are the only states that have insurance for some of their respective assets.
In view of this, there is a huge gap at the state level on insurance adoption, of which the proposed policy, whose name would be different, but have a similar feature to SIP policy, may have been proposed.
The cancelled SIP guidelines had pegged the operational licence at N2 million. NAICOM, in the policy, simplified the payment process of the licensing fee by allowing the SIP pay from the first commission earned, a step taken to Free State governments from financial burden in getting the licence.
The Commissioner for Insurance, Alhaji Mohammed Kari, said at the just concluded 2019 National Insurance Conference in Abuja that the withdrawal and cancellation of SIP policy does not mean the policy was dead.
He stressed that the initiative was one of the elements in the Market Development and Restructuring Initiatives (MDRI) that his commission intends to leverage on to deepen insurance penetration.
The commission, having examined the rate of increase of the industry’s premium income, according to him, observed that there is hardly any other best alternative to enhance the premium and deepen penetration than partnering the state governments in the distribution of insurance products.
The initiative, he stressed, would have helped take insurance to states where there is no insurance presence at the moment, adding that, insurance operators, in a bid to secure businesses in states where the initiative operates, would have opened their branches in such states as the guidelines only permits insurers in such states to insurance business accruing from SIP.
Kari told brokers that the commission will not relent in ensuring that there are multiple channels of distributions of insurance products, stressing that, the current channels are not enough to rapidly deepen insurance across the country.
At the event, the Treasurer of the Nigerian Council of Registered Insurance Brokers (NCRIB), Mrs. Ekeoma Ezeibe, cautioned NAICOM on the new move, stated that the commission should be careful not to open wrong doors, which would pose a problem to the entire industry, in a bid to expand the market.
SIP business model, before it was cancelled, will bring about 200 to 300 per cent insurance penetration in two years, while increasing the revenue base of state governments, as well as increase the profitability of insurance industry.