Matthew Otoijagha
Operators in the insurance industry, especially brokers, may have been up in arms against the National Insurance Commission (NAICOM) over the industry’s regulator’s release of the guidelines for State Insurance Producers’ (SIP) policy operation, which grants states the license to sell insurance products.
This may have angered the brokers, who are apprehensive that the policy, which takes effect from January 1, next year, may throw them out of business.
NAICOM appeared to have drawn the battle line with brokers and other insurance industry stakeholders when, last week, it released the guideline for the operation of the newly introduced SIP policy. The move, according to the Commission, was intended to enforce compulsory insurance and deepen its penetration in the country.
To get NAICOM more worried about low insurance penetration, the brokers, despite generating 90 per cent of insurance businesses, are said to have offices mostly in the urban areas, neglecting the rural areas or the grassroots. This, in NAICOM’s thinking, meant that rural dwellers are denied access to insurance services.
But as altruistic and patriotic as NAICOM’s policy may appear, the move obviously did not go down well with insurance brokers. Many of them feared that with the new arrangement, their days in the market may have been numbered.
Their apprehension is perhaps, understandable. Before now, only registered brokers and agents are permitted by law to act as insurance intermediaries between the insuring public and insurers in the industry.