The National Insurance Commission has issued a stern directive to 67 insurance and reinsurance companies to begin mandatory contributions to the newly established Insurance Policyholders Protection Fund.
The move is designed to create a financial safety net for Nigerians, ensuring that claims are settled even if an insurance firm becomes insolvent or has its operating licence cancelled.
Under the new guidelines, all affected operators, comprising 12 composite firms, 27 non-life companies, 13 life offices, 3 reinsurers, 8 micro-insurers, and four takaful entities, are required to remit 0.25 per cent of their Net Premium Income into the fund annually.
The deadline for these remittances has been fixed for 30 June of every year. An official statement from NAICOM warned, “Failure by any insurer or reinsurer to remit the full amount of its assessed contribution to the Insurance Policyholders’ Protection Fund within the stipulated timeframe shall constitute a ground for suspension or cancellation of its operating licence by the Commission.”
To ensure the integrity and growth of the protection fund, NAICOM has set a high bar for the financial institutions that will manage the assets.
