NAICOM issues operational guidelines for insurance firms
All existing insurance institutions and Insurtech firms operating under any arrangement classified as Insurtech must fully comply with these Guidelines within 30 days of the effective date;
The National Insurance Commission (NAICOM) has issued operational guidelines for Insurtech businesses in the country to enhance insurance services.
A statement by NAICOM in Abuja on Wednesday, said the guidelines would take effect from Aug. 1 to provide clear and unified regulatory framework for licensing, operations, and supervision of Insurtech firms.
Insurtech companies are entities that utilise digital and mobile platforms, Internet of Things (IoT) and other innovative technologies to streamline processes, reach new customers and offer diverse insurance products.
The commission said the objective of the guidelines was to establish regulatory standards for Insurtech setup and operations and support the country’s digital economy and fintech ecosystem.
It said that partnering insurtech firms would be permitted to transact specific classes of insurance in collaboration with licensed insurers while standalone ones would transact the categories of insurance that were specified in their license.
NAICOM said the categories excluded special risk products such as oil and gas insurance, marine and aviation insurance, retirement life annuity, and insurances of government assets and liabilities for Ministries, Departments, and Agencies (MDAs).
”Insurtech firms must comply with provisions related to risk management, investment practices, actuarial standards, outsourcing, and other key operational parameters as detailed in the Commission’s Prudential Guidelines.
”Disputes between Insurtechs and partner insurers must first follow arbitration protocols outlined in their agreements before approaching NAICOM.
”Consumers may refer unresolved issues from insurance transactions directly to the Commission for review and resolution.
”All existing insurance institutions and Insurtech firms operating under any arrangement classified as Insurtech must fully comply with these Guidelines within 30 days of the effective date,” the Commission said.
The commission said the guidelines aimed at fostering innovation, would lead to the development of new and innovative insurance products and service.
NAICOM said the guidelines would also ensure consumer protection and improve consumer experience, prioritising consumer interests and providing better services.
According to the Commission, it will also help to build trust and confidence in the Insurtech sector, driving growth and adoption, advance digital transformation within the insurance sector.