The Commissioner for Insurance Fola Daniel, has said the government would adhere to the no premium no cover policy as it is part of the nation's laws.
Daniel, in telephone interview, told Nigerian Compass that the policy is the law of the nation; hence there is no cause for anxiety over government's adherence to the policy which will take effect from January 1, 2013.
The National Insurance Commission (NAICOM) assurance stemmed from expressions by some insurance operators who said government attitude to premium payment may hinder the attainment of the policy. The operators have wondered how the policy would work since the government which is the highest insurance buyer in the nation, is also the highest debtor.
According to an operator who spoke under anonymity said that the government is yet pay her company the premium of this year's group life insurance.
The operator also called for unity among underwriters and brokers in handling the policy, adding that the policy would fail if underwriters would by-pass brokers to collect risks rejected due to non-conformity with the new policy.
President Chartered Insurance Institute of Nigeria (CIIN) Dr. Wole Adetimehin, said operators are looking up to NAICOM as government's adviser on insurance and industry's regulator to ensure the success of the policy.
NAICOM has said all insurance covers shall only be provided on a strict 'no premium no cover' basis, adding that only cover for which payment has been received, directly by the insurer or indirectly through a duly licensed insurance broker, shall be recognised as income in the books of insurers.
The Commission said any insurer, who grants cover without having premium in advance or premium receipt notification from the relevant insurance broker, shall be liable to a penalty of N500, 000 in respect of each cover so granted, and in addition, may be a ground for suspension of the license of the insurer.
It said irrespective of period of insurance, insurers shall ensure that at any point, they have received directly or indirectly, through the insurance broker the full premium in advance for cover being granted.
NAICOM noted that all brokers should within 48 hours of receiving premiums on behalf of any insurer; notify the insurer in writing in each case, of the receipt of such premium, adding that all such notification shall be accompanied by the broker's credit notes, acknowledging indebtedness to the insurer. It said upon the receipt of such credit notes, the insurer shall issue cover and forward the policy documents along with the related debt notes to the broker.
It said any broker who fails to notify the insurer of any premium received on his behalf shall be liable to a penalty that is not less than N250, 000 in each case of failure to notify.
The Commission mandated insurers to notify it, not later than 30 days from the end of every quarter, of all premiums acknowledged as having been received by brokers or lead insurers, but not remitted to them, adding that any insurer who fails to render such return, shall be liable to a penalty of N5,000 for each day of default.