PROSPECTIVE micro-insurance operators have flooded the offices of National Insurance Commission (NAICOM) with applications for licenses for the product soon to commence.Micro-insurance is an insurance cover targeted to protect low-income citizens against specific calamities.
NAICOM Head Corporate Affairs, Mr Rasaaq Salami, said the commission had received applications from many investors seeking state and unit micro-insurance licenses.
According to him, before the release of the revised Micro-insurance guidelines, some applications had already been received but such investors were asked to await the current guidelines.
Part of the new guidelines, which is aimed at increasing insurance penetration from the current 0.6 per cent to over two per cent in the near future, is a stipulation that micro-insurance outfits must set up shops in conspicuous locations and prove themselves to really serve the low-income earners at the grassroots.
The guidelines will also ensure an increase in annual premium income of the industry to at least N1 trillion by the year 2020.
In order to achieve the objectives, NAICOM Salami said the commission would properly examine the applications to ensure that only fit and proper investors are finally granted approval to operate.
In the guideline, NAICOM said a National Insurer, who seek 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 operation.
National operators are allowed to have a presence in at least six states within the three geopolitical zones of the federation.
In the case of a State Micro-insurer, the minimum capital base has been pegged at NI00 million with N60 million meant for general micro-insurance and N40 million for life operators.
State Micro-Insurer will also operate in only one state with at least three branches or office locations, each in a different local government area.
For a unit micro-insurer, NAICOM is requiring a capitalization of N40 million, broken into N25 million for general business and N15 million for life, with operation in one location within a local community.
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