Cloudy Weather Report Ramallah, Palestine +4°C, Cloudy
Home | News |

Insurance: NAICOM releases business conduct, sanctions in new Tier-Based Regime

Lagos – The National Insurance Commission (NAICOM) on Sunday released conduct of business practices and sanctions for insurance companies under the new Tier-Based Minimum Solvency Capital (TBMSC) regime.


A statement signed by the Director Supervision, NAICOM, Mr Barineka Thompson, said the ethical codes would enhance soundness of insurers.

NAICOM explained that in the new TBMSC capitalisation structure, insurers would automatically fall in any of tier 1 to 3, based on their financial statement position.

“No mandatory capital injection is expected from an insurance firm except the insurer deems it fit.

“Life insurance firms need a minimum solvency level of N6 billion for Tier 1, N3 billion for Tier 2 and N2 billion for Tier 3.

Non-life business requires a minimum of N9 billion for Tier 1, N4.5 billion for Tier 2 and N3 billion for Tier 3.

“While composite companies (combination of life and general business) require a minimum of N15 billion for Tier 1, N7.5 billion for Tier 2 and N5 billion for Tier 3,’’ the commission explained.

The commission also reiterated that the new TBMSC capitalisation structure is not to punish operators but to nourish them.

It maintained that the regulator was poised to ensure that the insurance industry was isolated from future financial crisis.

“The TBMSC framework has been exposed to insurance companies on July 25; Letter of Advice to each insurer on their “Solvency Assessment Status’’ as at 2017 was issued on Aug. 30 and NAICOM would release and publish categorisation list of insurers in October.

“What is the need if an insurance company underwrites businesses it would not be able to pay their claims when the need arises,” NAICOM said.

The business conducts by NAICOM states that an insurer shall not underwrite insurance policies or undertake risks outside the Tier Level or combination in the case of a composite insurer as authorised by the Commission.

“Any violation shall attract penalty equal to the sum of the advised gross premium involved and in addition, the CEO and other relevant Officer(s) of the insurer shall be penalised as the commission may determine.

“The sanction above will similarly extend to a broker that may be found to be culpable on the advised gross commission involved,’’ NAICOM stressed.

The Commission said it had the sole responsibility to publish the list of insurers and their qualified Tier levels before the commencement of the policy.

It said all insurers certified to operate in a specified risk class shall be viewed and treated by insurance institutions and the insuring public as having equal opportunity, rights, obligations and qualifying financial capacity.

According to the commission, the “Tier-Based” inference shall not be used by an insurance institution for public advertisement, commentary, presentation and communication whatsoever without the prior approval of the Commission.

“No Insurance institution shall use the Tier-Based classification as a de-marketing tool against an insurer, within and outside the institution,” it said.

It further said any violation in addition to previous stated sanctions would attract the sanctioning of the Chief Executive Officer with suspension of operational license for a period of six months.

“This also extends to other relevant Officer(s) of the insurance institution,’’ NAICOM stated. (NAN)


No tags for this article
Disclaimer: Opinions expressed here are those of the writers and do not reflect those of accepts no responsibility legal or otherwise for their accuracy of content. Please report any inappropriate content to us, and we will evaluate it as a matter of priority.

Most Watched Videos

View all posts

Most Read News

View all posts

Amazing story of 50-year-old woman who gave birth to healthy quadruplets

Tracey Britten made history when she became the oldest woman in the UK's history to give birth to quadruplets. The 50-year-old is now the mother

Traditional rulers warn Igbos against installing a king in Cross River

- Traditional rulers have reacted to the plan by the Igbo community in Cross River state to crown E. A. Ezenweanyi as the Eze Ndigbo

You Acted in Ignorance Sirawoo Tells FCT SWAN

The National President of the Sports Writers Association of Nigeria SWAN, Honor Sirawoo has condemned the decision of the FCT chapter in pulling out from

Triple T premium Estate assures of affordable housing solution

Real estate firm, Triple T Premium Estate, has vowed to contribute its quota towards addressing the housing challenges in Nigeria by providing affordable housing solutions

Breaking: IMO APC governorship candidate missing as INEC publishes 67 names

By Anthony Ogbonna The name of the governorship candidate  of the All Progressives Congress, APC, in Imo state was seen missing on the list of names published

EFCC recovers N871bn looted funds, 407 mansions in 3 years – Magu

By Soni Daniel, Northern Region Editor ABUJA—ACTING Chairman of Economic and Financial Crimes Commission, EFCC, Ibrahim Magu, boasted yesterday that he had set a new record

Most Watched Movies