NAICOM, CBN agree on bancassurance modalities

Hope for the resolution of disagreements between National Insurance Commission (NAICOM) and the Central Bank of Nigeria (CBN), over disagreement on the terms and conditions for the operation of bancassurance for the banking and insurance in the industry has appeared.

Bancassurance is an arrangement in which insurance companies leverage on the customer base of banks to sell insurance products to banks’ customers.

Tribune Online learnt that already, a joint committee set up by the two organisations to work out modalities for the instruments have submitted its report.

The process for the resolution commenced towards the end of 2016 when National Insurance Commissioner, Mr. Mohamed Kari paid a visit to Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele.

In the heat of the disagreement over the matter last year, NAICOM ordered the 58 insurance firms in the country to cancel any form of channels used to sell their products and services except the ones licensed by the commission.

Also, other insurance product distribution channels, including airlines, online or web-based aggregators, telecommunications and other platforms not approved by NAICOM, have been suspended by the insurance regulator.

Sources in Abuja confirmed that both Kari and Emefiele at their meeting agreed that the suspension of bancassurance was a threat to the goal of financial services penetration and inclusion.

Banks were seen to provide a huge customer base and a payment infrastructure that supports high persistence of premium payments, which insurers can leverage over a period of time to grow their market share.

However, disagreement occurred when NAICOM attempted to license and regulate banks participating in insurance business.