NAICOM Out with Guidelines for Insurance Web Aggregators’ Operations
In ordet to consolidate the recent digitalisation of its supervisory and regulatory processes, the National Insurance Commission (NAICOM) has come out with what it tagged, “Insurance Web Aggregators Operational Guidelines” for all web aggregators and insurers.
A web aggregator is a company registered under the Companies Act which maintains or owns a website and provides information on insurance products of different insurers. Only licensed aggregators can display products and price comparisons of insurance company products.
The guideline which took effect from February 1,2022 according to NAICOM will serve as a working document to register, supervise and monitor web aggregators as insurance intermediary who maintain a website for providing information on products of different insurers.
According to the commission, registration for approval as a web aggregator goes through three stages detailing copy of no objection/approval by Nigerian Communications Commission (NCC) and six other listed requirements.
NAICOM, said the stage two of the process, lists 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.
“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, “the commission stated.
Spelling out the registration process, NAICOM stated that there were three stages; 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 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.
On mode of operations, it said 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 further stated that the indemnity cover shall be on a yearly basis for the entire period of its licence.
NAICOM, had late last year announced the digitalisation of all its operations in a letter it addressed to the Managing Directors/Chief Executive Officers of insurance firms in Nigeria.
NAICOM said the move was to enhance efficiency and effective service delivery and that the process started September 1, 2021.
The commission in a circular to this effect signed by its Director, Policy and Regulations, Leonard Akah, noted that its engagement with all insurance institutions would transmit from manual to online processing and that all operational activities or issues concerning insurance companies that require the Commission’s attention, comment, and approval would be submitted and processed via NAICOM Licensing System.
