There are strong indications that the insurance industry regulatory body, the National Insurance Commission (NAICOM) may rejig the cancelled State Insurance Policy (SIP) policy in a bid to enhance insurance penetration in the 36 States of the federation, including the Federal Capital Territory(FCT).
LEADERSHIP investigation revealed that the commission is concerned about low insurance adoption in most states of the federation as state governments were not insuring their assets as well as fail to have group life insurance cover in place for their respective workers.
It seems the regulatory body has realised 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 two states, which are, Kaduna State and FCT have group life insurance coverage for their workers as the remaining 35 states shun this insurance policy.
Kaduna, Lagos, Ogun and two other States, findings revealed, are the only states that insure some of their respective assets.
To this end, 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.
Speaking at the just concluded 2019 National Insurance Conference in Abuja, the Commissioner for Insurance, Alhaji Mohammed Kari, said the withdrawal and cancellation of the State Insurance Producer (SIP) policy does not mean the policy is dead.
Stating 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, Nigerian Council of Registered Insurance Brokers(NCRIB) Mrs. Ekeoma Ezeibe, cautioned NAICOM on the new move, stating that the commission should be careful not to open wrong doors, that 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.
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