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NIACOM Warns Customers On Unlicensed Risk Underwriters’ Patronage

The National Insurance Commission (NAICOM) has advised insurance customers not to do risk underwriting business with unlicensed operators in the insurance industry as well as allot proportion of risk to local underwriters without taking due cognisance of the insurers’ capacity.

The commissioner for Insurance, Mohammed Kari, who gave the advice during a chat with media in Lagos, noted that some customers working in collaboration with some intermediaries usually excluded some underwriters from underwriting their risks without tenable justification.

Kari warned that the Commission would not accept risks under-written by non-licensed players as doing otherwise will undermine efforts by the government to grow the industry, particularly its contributions to the nation’s Gross Domestic Product (GDP).

He explained: “Some insured in alliance with intermediaries, chose to exclude some underwriters from participating in underwriting certain risks without cogent tenable justification

“Once the consumer places his risks with the insurer, whether direct or through a broker, he or the broker has no role in the placement of the reinsurance. We would not accept insurances placed through a non-licensed operator in this market.

“Where we have noticed such practices, we have rejected applications from operators for approval to cede such risks abroad. This action of the consumer and broker sometime leads to delays in placement of the risk even when the insured has paid its premium to the intermediary. While the Commission is not averse to ceding of risk offshore, it must be done only when the local market has taken the much its capacity would allow”, the NAICOM boss added.

According to him, apart from the above challenges, the Commission was still having problems with delays in submitting evaluation results of bidding processes to the Commission, the emerging practice of supposed premium funding by local brokers on behalf of the insured and delays by the insured in issuing placement and renewal instruction to the insurer.

Kari, who pointed out that more often than not, the delays usually make it impossible for the insurer to meet the application period for the placement of excess risks offshore where applicable., lamented that the ugly trends were not only dangerous to the industry, but to the consumer.

To reduce some of the challenges, the seasoned insurer said that the establishment and recent upgrade of the Complaint Bureau Unit in the Commission were aimed at dealing promptly with complaints from members of the public against any insurance operator as well as to respond to their inquiries.

Kari clarified: “This unit has recently been upgraded and is headed by a Deputy Director to attend to aggrieved consumers. Many aggrieved consumers have continued to access this desk to register their complaints with us. We advise you to take advantage of this desk and report your challenges to us and I assure you that any company found in default shall be compelled to do the needful”.

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