Insurance Brokers Risk Licence Loss Over Single Income Source

By Nse Anthony-Uko
(Sundiata Finance) – Insurance brokers that are generating up to 50 per cent of their total income from a single source may forfeit operational licence as the National Insurance Commission (NAICOM) is not ready to grant them licence renewal.

Currently, the commission is coming up with a guideline that will ensure brokers expand their tentacles to capture more businesses to increase profitability as against the current practice of relying solely on one or two accounts for survival.

The regulatory body had earlier promised to open up the insurance market by increasing the distribution channels in a bid to deepen insurance penetration. To this end, NAICOM had recently released draft guidelines on independent agent, mutual, associations, community and state government financial advisor, which it believes will also help deepen insurance retail market.

NAICOM said it is planning 12 new distribution channels as part of its efforts to boost market development and deepen insurance penetration. The commission believes that creating more distribution channels to support baccassurance referral model which is already in place will enable insurers penetrate the grassroots.

According to the Commissioner for Insurance, Alhaji Mohammed Kari, said “These channels will increase accessibility to insurance products, so that majority of the population can access the product as part of their financial planning.”

Responding to this, the Outgoing President, Nigerian Council Of Registered Insurance Brokers (NCRIB), Mr. Kayode Okunoren, said NAICOM stand on sanctioning brokers with 50 per cent income from a single source might not be visible as there are companies who have several lines of businesses as their subsidiaries, yet, they are registered in the broker’s book as a company.
He believes it is still early to debate on this issue, saying, in a likely manner of NCRIB, it will dialogue with the commission if it is going to negatively affects the broke.

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