The National Insurance Commission has intensified its battle against the offering of incentives by insurance firms to secure business in the industry. This is due to the fact that this so-called incentive offering to clients has gradually become unpleasant, unethical, and unhealthy.
The managers in the industry actually affirmed that the market operators are all in a stiff competition in a bid to out-do each other. They now offer incentives such as commission, rate cutting, etc in order to secure business deals.
The Insurance Commissioner, Mohammed Kari has officially stated that any operator caught offering incentives to secure deals would be severely punished as it is against the rules and regulations guiding the practice of insurance in the Nigerian insurance industry.
He backed up his threat by quoting what the commission once said in a circular to insurance companies in 2014 thus:”it shall be illegal for any insurance firm to entreat, offer or allow commission or rebate in the practice of insurance except as provided by the existing insurance guidelines.” According to him, those caught defaulting would face the consequence of their action by paying penalty as stated by the insurance law.
NAICOM also ordered that all insurance operators are required to submit its brokerage commission, return on its rebates, etc quarterly to the commission and that no insurance company should collect premium more than as as stated on an insurance policy.
NAICOM also emphasized that failure to comply with the circular shall lead to penalty in accordance with the relevant provision of the insurance Act 2003, NAICOM Act 1997, guidelines and any other penalty that may be added by the commission as time goes on.
In recent times, the Nigerian Association(NIA) has expressed its concern on the non compliance of insurance firms to the insurance market agreement. According to the NIA, a rating committee has been set up to review the rates on motor vehicle insurance in order to ensure compliance by member companies.