Conventional insurance firms can now set up their Microinsurance department – NAICOM

The National Insurance Commission (NAICOM) has issued a circular (NAICOM/DPR/CIR/32/2020) allowing conventional insurance companies in Nigeria to exploit the huge opportunities in the Microinsurance window.

The circular was signed by Akah L M, Director (Policy & Regulations), and disclosed that the requirements for the conventional insurance firms to be granted approval for the window operation includes:

• The insurer shall seek and obtain approval of the Commission to transact microinsurance business.
• Board resolution approving the establishment of a microinsurance department.
• Applicant shall apply for window microinsurance national operation licence.
• The department shall be headed by an experienced Insurance Officer, not below the rank of an AGM.
• The Insurance Officer must possess a minimum of 7 years post Associate of Chartered Insurance Institute of Nigeria qualification or a minimum of 10 years working experience in a technical department of an insurance institution.
• Any window operator shall segregate the financial records of its microinsurance business from that of the conventional business.
• Appropriate reinsurance arrangement shall be put in place.

What this means

The microinsurance window presents a gold mine waiting to be tapped by the conventional insurance firms in Nigeria, helping them to achieve critical mass in the market.

This would afford opportunities for those in informal sectors, as well as low-income people and households to enjoy insurance products and services that will protect them against unexpected events, that could threaten their livelihood and businesses.

Source: Nairametrics