Insurance regulator, the National Insurance Commission (NAICOM), is putting structures in place that will enable stockbrokers act as referral or partner agents in insurance distribution.
The need to deepen insurance penetration in Africa’s most populous black nation is critical in the Commission’s market development agenda, which targets to increase the sector’s contribution to the national GDP.
Insurance penetration in Nigeria is less than 0.5 percent, putting Nigeria 10th in Africa.
NAICOM in its continuous effort to achieve this set objective paid a working visit on Munir Gwarzo, director-general, Securities and Exchange Commission (SEC), to intimate him of the plan to engage stockbrokers as referral agents in the insurance distribution channel.
Leonard Akah, deputy director, Authorisation and Policy, who led the NAICOM delegation, outlined the role of stockbrokers in the sales of insurance products as being limited to referral partners/agents to the insurance companies without being exposed to any risk.
In return, he said the stockbrokers would earn a percentage commission on any business they were able to generate. This initiative is expected to create opportunities for the stockbrokers that are interested without distracting them from carrying out their core functions.
He said that draft guidelines to ensure seamless operation of this initiative would be sent to the SEC for input before the final exposure.
In his response, Gwarzo, represented by Isyaku Bala Tilde, head, monitoring department, thanked NAICOM for the initiative and promised to collaborate with the Commission to ensure its smooth execution.
NAICOM has identified various professionals outside insurance for consideration in the referral agency model. These include accountants, lawyers and a host of others
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