The National Insurance Commission (NAICOM) has issued a circular (NAICOM/DPR/CIR/32/2020) allowing conventional insurance companies in Nigeria to exploit the huge opportunities in the Microinsurance window.

The circular was signed by Akah L M, Director (Policy & Regulations), and disclosed that the requirements for the conventional insurance firms to be granted approval for the window operation includes:

  • The insurer shall seek and obtain approval of the Commission to transact microinsurance business.
  • Board resolution approving the establishment of a microinsurance department.
  • Applicant shall apply for window microinsurance national operation licence.
  • The department shall be headed by an experienced Insurance Officer, not below the rank of an AGM.
  • The Insurance Officer must possess a minimum of 7 years post Associate of Chartered Insurance Institute of Nigeria qualification or a minimum of 10 years working experience in a technical department of an insurance institution.
  • Any window operator shall segregate the financial records of its microinsurance business from that of the conventional business.
  • Appropriate reinsurance arrangement shall be put in place.

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What this means

  • The microinsurance window presents a gold mine waiting to be tapped by the conventional insurance firms in Nigeria, helping them to achieve critical mass in the market.
  • This would afford opportunities for those in informal sectors, as well as low-income people and households to enjoy insurance products and services that will protect them against unexpected events, that could threaten their livelihood and businesses.