We are encouraging investors to come and get smaller type of licence that would enable them operate in small areas, the Commissioner for Insurance, Mohammed Kari, has said.
He explained that the commission hopes to bring down the licence fee and issue people licences to operate either on national, state or as a unit.
“An operator could be issued a licence to operate within a market, that would enable the operator to be closed to the consumers. We are looking at this as a way to increase participation and deepen the market,” he said.
He noted that the step is expected to move insurance professionals that are in the wrong side of the business into fruitful ventures, stressing that presently, there are so many professionals that are running businesses without realizing the implications, of doing so.
He posited that with the plan being mulled by the commission, such professionals can use their professionalism in running a single digit unit or two to three units at the local government, adding that the move would pave way for effective operations and better cash flow system.
“We believe the micro insurance and takaful sectors can take a lot of professionals, because even before one operates there he must have certain level of professionalism,” he said.
A consultant to NAICOM on Market Development and Restructuring Initiative, Yemi Soladoye, said the capital requirement by the Commission was not unattainable.
In an interview with The Nation, Soladoye said the plan by NAICOM to review the required capital for registering microinsurance in the country is commendable.
He said he had told the commissiom during the administration of former Commissioner for Insurance, Fola Daniel, that N350 million as capital requirement was too high.
He said: “Five years ago, I told them that N350 million cannot work because they won’t get people to register the business. I believe that if they find anybody to register with the current guideline, the person will not do the micro insurance business. Up until now, they did not get anybody to register except for registered insurance companies that only took a window.
“I told them to consider staggering the licence to unit, local government, state and national, give each a licence and different capital. For instance, I recommended N5 million capital for unit licence, which is the capital required for a broking firm, N20 million for operating a local government licence and N350 million for national licence.
“I am happy that the Commissioner, Mohammed Kari has finally in 2016 decided to give it a thought. I am optimistic that if he finally reviews the capitalisation, the objective of ensuring that insurance is downscaled to the grassroots will be achieved,” he added.