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…Moves liability insurance to N15,000
Maduka Nweke
The National Insurance Commission (NAICOM) has raised the capital base for micro insurance business to N600 million with effect from January 1, 2018.
According to a revised guideline on micro insurance operations, the operation which has been classified into units has state micro insurance base raised to N100 million; national, N600 million, and various units to N400 million.
A document made available to Daily Sun by its Head, Corporate Affairs, Rasaaq Salami, and signed by the Acting Director, Authorisation and Policies, Leonard Akah, revealed that the guideline is part of the financial inclusion strategy to stimulate growth in the sector especially the retail end of the market, which will drive insurance penetration and service the lower income earners who hitherto have been excluded from insurance.
The document enjoins insurance operators to adhere and comply with existing approved premium rates for all compulsory classes of insurance. “Every operator should be guided by the rates in their various transactions. Going forward, NAICOM will strictly monitor and enforce compliance,” it said.
The guideline stated that a national insurer, who seeks composite micro insurance licence, is expected to be capitalised to the tune of N600 million, while N400 million minimum capital base is needed from a general micro insurance and N200 million for a life operations. It noted that national operators are allowed to have presence in at least six states within the three geopolitical zones of the federation. For a state micro insurer, the minimum capital base is pegged at NI00 million, broken into N60 million for general and N40 million for life operators. The regulator also expects such underwriter to operate only in one state of the federation with at least three branches or office locations, each in a different local government area.
The commission pegged premium for private motor at N5,000; commercial motor (own goods/staff bus) N7,500; commercial motor (trucks/general cartage) N25,000; motor trade, N5,000; special types, N5,000 and motorcycle, N1,500.
It quoted the approved rates on occupiers (public buildings) liability insurance from N1,500 to N15,000, depending on the space the insurance policy covers. “For example, the approved rate per room in a hotel is N1,500. The approved rates per floor in recreation centres or cinemas is N15,000.
“The approved rate on a plot of land is N5,000 while that of the single occupier residential building is N5,000, while the single occupier office building is also N10,000. On healthcare professional indemnity insurance, the approved rate is based on the number of rooms.
“For structures with 20 rooms and below, the discount rate is N10,000,000, while those with 500 rooms and above are discounted for N100,000,000. For those with between 51 and 100 rooms, the discount rate charged should be N40,000,000,” it added.
The document in part states that the discount rates cover compulsory classes of insurance like statutory life insurance, builders’ liability insurance, and occupiers (public buildings) liability insurance. “Others are healthcare professional indemnity and motor third party insurance. The revised micro insurance guideline took effect from January 1, 2018,” the document said.
