NASS proposes N25 million fantastic for anybody working unlicensed insurance coverage enterprise in Nigeria
The Nationwide Meeting of Nigeria has proposed a penalty of N25 million for people discovered working unlicensed insurance coverage companies within the nation.
This provision is a part of the proposed Nigeria Insurance coverage Trade Reform Invoice, 2024, which seeks to overtake the prevailing insurance coverage regulatory framework in Nigeria.
In response to the proposed invoice, any particular person who engages in insurance coverage enterprise with out the correct licensing might be liable to a fantastic of N25 million or face a jail time period of two years, or each.
This proposed quantity is a 100-fold enhance from the N250,000 fantastic for the same offence within the Nigeria Insurance coverage Act 2003
Principal Officers of unlawful insurance coverage corporations face N50 million fantastic
For corporations or corporations discovered responsible of the identical offense, the penalty doubles, with principal officers of the group going through fines of N50 million every, alongside the opportunity of a two-year jail sentence.
The invoice doc seen by Nairametrics learn: “An individual who transacts any insurance coverage enterprise with out being licensed for that function beneath this Invoice commits an offence and is liable on conviction, within the case of —
“(a) a person, to a fantastic of N25,000,000.00 or to imprisonment for a time period of two years or each.
“(b) an organization, agency or different mixture of individuals, every Principal Officer of the corporate, agency or different mixture of individuals accountable to a fantastic of N50,000,000.00 or to imprisonment for a time period of two years; or to each.”
The invoice additional stipulates that any entity making use of for a license have to be integrated as a restricted legal responsibility firm beneath the Firms and Allied Issues Act No. 3 of 2020, or established pursuant to another regulation or enactment in Nigeria. This ensures that solely legally acknowledged entities can function within the insurance coverage house.
As soon as licensed, insurers should conduct their enterprise based on sound insurance coverage rules. This contains prudent danger administration, {financial} stability, and adherence to business greatest practices. Failure to adjust to these rules can lead to the revocation of the insurer’s license.
The invoice outlines a number of circumstances beneath which the Fee might cancel an insurer’s license. These embrace insolvency, failure to keep up required capital, cessation of enterprise actions, and involvement in fraudulent practices. If a license is cancelled, the insurer is prohibited from accepting new enterprise, and the Fee might act as a receiver to handle the corporate’s affairs.
What you need to know
The Senate in July 2024 handed for a second studying the invoice to reform the insurance coverage sector in Nigeria via passage of invoice to that impact for a second studying.
The invoice sponsored by its Chairman, Committee on Banking, Insurance coverage and Different {Financial} Establishments, Senator Adetokunbo Abiru (APC Lagos East), seeks an Act to repeal the Insurance coverage Act, Cap117 2004, the Marine Insurance coverage Act, Cap M3 Legal guidelines of the Federation of Nigeria 2004, the Nigeria Reinsurance Company Act, Cap, N131, Legal guidelines of the Federation of Nigeria, and many others.
In response to Abiru, the invoice seeks to supply for a complete Authorized and Regulatory Framework for Insurance coverage Enterprise in Nigeria and Associated Issues.
