NIGERIAN INSURERS FACE TOUGHER SANCTIONS FOR NON-PREMIUM COLLECTION

Insurers in Nigeria are now liable for a fine of NGN500,000 ($3,200) if they provide insurance cover without collecting a premium, Commissioner for Insurance Fola Daniel has said in a memo issued to the industry. Local paper Vanguard reported that all insurance covers should be provided strictly on a basis of "no premium no cover". Mr Daniel said that only cover for which the income had been received should be recognized as income on the insurer's books. He added that the provision of cover without receiving a premium would also be grounds for the suspension of an insurer's licence. Mr Daniel said that insurers should notify the Commission (NAICOM) not later from 30 days from the end of every quarter of all premiums acknowledged as received by brokers or lead insurers but not forwarded to the underwriter. He said that lead insurers or brokers that failed to remit premiums they claimed to have received would be subject to a fine of NGN5,000 a day. Finally Mr Daniel urged insurers and brokers to reconcile their 2012 accounts no later than March 31 2013.