Insurance operators are currently in a state of fears over the ‘’ directives set to become operational by 1st January 2013.

According to our investigations, most of the players (brokers and underwriters alike) are being cautious of breaching the rule. Some underwriters who confided in Insuranceadvicenigeria confirmed that they do not want to be the sacrificial lamb or scapegoat. The situation is such that some insurance companies cannot even conclude the renewal of their company assets insurances because they are required to pay upfront to their insurers.

A large volume of in Nigeria are renewable in January. But due to the directive, most renewals are inconclusive as underwriters have refused to issues documents to the brokers except payment is made in advance in line with the directive. The new directive stipulates that underwriters cannot issue documents except has been paid in advance or the broker notifies the underwriter (to the effect that has been collected by the broker) within 48 hours. The directive also forbid payments in installments.

In the past, the underwriters issue documents (motor certificates, Cover notes, Group life Certificates, Marine certificates etc) well ahead of the renewal dates. Insurance industry players are being cautious so that they would not breach the NAICOM guidelines and be liable to pay heavy fines.

Most underwriters who spoke to Insuranceadvicenigeria believe that it is the right thing for the industry. They are of  the opinion that the scourge of outstanding will soon be over and underwriters would become stronger as they would have funds to pay claims faster. Also, unethical practices in most public sector insurances would become extinct.

Brokers, on the other hand, feel that the implementation would be challenging given the low level of insurance in Nigeria. They reasoned that the industry premium income may reduce in 2013 if the  directive is fully implemented. They posited that there would be lull in insurance business early in 2013 as companies would be cautious.

It is instructive to note that industry premium in 2010 was N200 billion up from N178 billion recorded in 2009. Also, insurance in Nigeria is less than 1%.

You can also read:  http://insuranceadvicenigeria.com/2013-10-major-ways-no-premium-no-cover-will-affect-insurance-companies.html/

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{ 3 comments… read them below or add one }

kabiru Abiodun Ganiyu January 2, 2013 at 10:34 am

It is a welcome development which will protect insurance industry from non payment of premium by insureds who have the documents prior to payment. some even don’t pay until they have casualty, some may not even pay again since there is no claim on their parts.
if you are reading this comment and you have privilege to fix me up in the industry I will be happy.
I studied insurance and i have passion to work in the industry in fact I m in the last stage of CIIN. thanks for understanding.

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kabiru Abiodun Ganiyu January 2, 2013 at 2:32 pm

It is a welcome development which will protect insurance industry from non payment of premium by insureds who have the documents prior to payment. some even don’t pay until they have casualty, some may not even pay again since there is no claim on their parts.
if you are reading this comment and you have privilege to fix me up in the industry I will be happy.
I studied insurance and i have passion to work in the industry in fact I m in the last stage of CIIN. thanks for understanding
contact me on

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Wasiu Popoola February 1, 2013 at 11:47 am

Section 50 of Insurance Act 2003 (No Premium No Cover) – If NAICOM is ready to enforce this section of the Act, i think is a welcome development and if embraced by the entire practitioners , the Industry will be a better for it.

Of what benefit is a cover provided by an underwriter placed by a Broker who laboured day and night, without any consideration for the cover provided.

When premium is not paid commission will not be paid and claim will not be entertained if the unexpected happened. It is a total loss for all parties concerned.
The only solution is prompt remittance of premium so that underwriter can invest for profit, Brokers can earn commisssion on time to attend to their obligations and claims can be settled without any rancour .

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