What Niger Insurance, Standard Alliance licence withdrawal means for policyholders
On Tuesday, the National Insurance Commission (NAICOM) informed all insurance stakeholders and members of the public that it had cancelled the certificates of registration of Standard Alliance Insurance Plc and Niger Insurance Plc, effective June 21, 2022.
The cancellation of an insurance company’s licence by the regulator means that the company will cease to exist. In other words, the company will no longer receive business from the insuring public, as its name will be removed from the list of registered operators.
In this situation, the company is handed over to receiver managers and liquidators, whose responsibility will be to liquidate the assets, pay outstanding liabilities and finally close the company’s books after a certain period.
This kind of development has a long-term implication for policyholders whose policies were yet to expire as at the date of cancellation of the licence of that company or insurer.
What will happen to a policyholder also depends on whether or not the policy is life cover or non-life cover, and whether the company is a life insurance company or a general business company.
If the company is into general business, a policyholder’s contract with the insurer expires or elapses at the end of the year of that contract. Therefore, in this case, liabilities will be on filed claims and matured risks during the year of the contract.
For a life business company, the case is different.
Here, liquidators, through sale of assets of the company, pay off policyholders whose risks have matured as at the date of cancellation. That is, they are paid their matured claims and benefits from available assets of the company.
But for life policies that are still running and yet to mature, they could be transferred to other healthy life insurance companies that will be willing to take them up, or it could be terminated and benefits worked out, depending on what the policyholder wants.
In the case of Niger Insurance Plc and Standard Alliance Plc, the regulator, NAICOM, said receiver managers and liquidators had been appointed.
NAICOM, in the notice of withdrawal, said it had appointed Sanya, Ogunkuade Esq of Plot 217, Upper Grace Plaza, third floor (left wing), Shetima Munguno Crescent, Behind Julius Berger Equipment Yard, Utako, Abuja as the receiver/liquidator for Niger Insurance; and, Kehinde Aina Esq of Aina Blankson LP, 5/7, Ademola Street, SW Ikoyi, Lagos as the receiver/liquidator for Standard Alliance Insurance.
Rasaaq Salami, head of corporate communications and market development of NAICOM, said on behalf of the commissioner for insurance that “all stakeholders are advised to forward their enquiries to the respective receiver/liquidator for each company for their necessary action.”
The commission assured all stakeholders of the safety and protection of their interests, he said.