NAICOM Releases Operational Guidelines for Web Aggregators, Insurers
The National Insurance Commission (NAICOM) has released in line with the recent digitalisation of its supervisory and regulatory processes the “Insurance Web Aggregators Operational Guidelines” for all web aggregators and insurers.
A web aggregator is said to be a company registered under the Companies Act which maintains or owns a website and provides information on insurance products of different insurers and only licensed aggregators can display products and price comparisons of insurance company products.
According to NAICOM, the guideline which operations took effect from February 1,2022 will serve as a working document to register, supervise and monitor web aggregators as an insurance intermediary who maintains a website for providing information on products of different insurers.
The Commission noted that the registration for approval as a web aggregator goes through three stages detailing a copy of no objection/approval by Nigerian Communications Commission (NCC) and six other listed requirements.
NAICOM pointed out that the stage two of the process, includes organisational chart showing functional responsibilities, board resolution to commence a web aggregator operation and 12 other requirements including professional indemnity cover of not less than N20 million.
The Commission stated further that “All insurance companies and web aggregators operating under any agreement of a business relation whether web aggregation business or otherwise shall comply with the provisions of this guideline within sixty (60) days of its coming into effect.”
There are three stages on the registration process as stage one begins with physical verification of web aggregator head office address and IT infrastructure to be deployed, followed by payment of licence fee and the ultimate, issue of licence.
On stage two, which is Service Level Agreement (SLAS) the guidelines stated that such ‘agreement’ with the insurer should be filled with the Commission within 30 days for ratification and meeting all 16 requirements itemised.
While the third stage which is on mode of operations, spelt out that the requirements was clear on professional indemnity which every web aggregator should possess and continue to maintain a professional indemnity insurance cover with a minimum limit of liability of N20 million or 50 percent of its annual gross commission income (whichever is higher) throughout the validity period of the licence granted by the Commission.
NAICOM affirmed that the indemnity cover shall be on a yearly basis for the entire period of its licence.
Recall, NAICOM had late last year declared the digitalisation of all its operations to enhance efficiency and effective service delivery with effect from September 1, 2021 in a letter addressed to the Managing Directors/Chief Executive Officers of insurance firms in Nigeria.
NAICOM’s circular to this directive, signed by its Director, Policy and Regulations, Leonard Akah, highlighted that its engagement with all insurance institutions would transmit from manual to online processing, while all operational activities or issues concerning insurance companies that require the Commission’s attention, comment, and approval would be submitted and processed through NAICOM Licensing System.
