The President, Nigerian Council of Registered Insurance Brokers, Mr Shola Tinubu, has said the council will make its contribution to the zero draft guidelines issued by the National Insurance Commission, which aims to introduce a two-tier mode of operation and raise brokers’ operational licensing fees.
He said the guidelines were currently being reviewed by the technical and legal committees of the NCRIB for its final input.
Tinubu said, “We believe that if our suggestions and input are favourably considered, the commission will definitely come out with a more robust and acceptable document for all stakeholders.
“Currently we are concerned that the guidelines may be seeking to tier brokers which is not seen as required since brokers are professional firms and not risk carriers. However, we have confidence in the approach of the commission to ensure all aspects are fully discussed before decisions are made.”
NAICOM had in June issued the draft guidelines, disclosing plans to introduce a two-tier mode, comprising corporate and partnership operations.
The guidelines proposed N5m (corporate) and N3m (partnership) licensing fees for the insurance brokers as against the current N2.5m fee.
NAICOM stated that investors seeking corporate licence would be made to pay a non-refundable application fee of N500,000 and partnership licence of N300,000.
It added that after registration process but prior to issuance of a licence, brokers would pay a licensing fee of N4.5m for corporate and N2.7m for partnership, which together with the application fee would amount to N5m and N3m respectively.
The draft guidelines stated that the brokers would pay bi-annual licence renewal fee of N1m for corporate and N600,000 for partnership, while the corporate brokers would maintain a professional indemnity cover of not less than N10m, which was N100m in the case of oil and gas insurance brokerage or 50 per cent of its annual brokerage income for the preceding year, whichever is the greater.
While speaking on the recapitalisation of the insurance sector, Tinubu said the new capitalisation system tagged, ‘Recapitalisation of insurance companies; the tier-based minimum solvency capital,’ would be partially introducing the risk-based capital model in a three-tier recapitalisation system, whereby firms would be graded as tier-three, tier-two and tier-one.
He, however, noted that the tier system or process was independent of the assessment for solvency, such that companies classified as top tier could possibly have significant solvency issues.
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