The attention of the National Insurance Commission (NAICOM)
has been drawn to the fact that virtually all registered insurance brokers in
Nigeria now claim to be reinsurance brokers without due regard to the
provisions of the Insurance Act 2003 relating to the practice of reinsurance
broking.
Daily Independent gathered that in a petition to NAICOM, the
licensed reinsurers stated that there are some insurance brokers in the country
operating as reinsurance brokers without having any knowledge or understanding
of what reinsurance broking is all about.
Section 43 of the Insurance Act provides that “(1) No
insurance broker shall undertake reinsurance broking without the approval of
the commission.
(2) The commission may grant an approval to an insurance
broker for purposes of subsection (1) of this section if it is satisfied that:
(a) the insurance broker has the required expertise to
conduct the class of reinsurance business ; and
(b) at least one partner or director of the insurance
broking firm or company has at least five years working experience in the
middle management cadre of a reinsurance broking firm or company.”
The petition reads in part: “on a typical reinsurance treaty
bouquet, we may have more than eight ‘reinsurance brokers’ with probably only
one or two of the brokers can actually be regarded as reinsurance brokers,
others are just there to make up the number without any knowledge or
understanding of what reinsurance broking is all about.”
“We are not saying that these companies reinsurance broking,
but they should comply with the provisions of the law and as well train their
members of staff. This development has not helped the growth of reinsurance
sector.”
In order to bring sanity to the reinsurance broking sector,
the reinsurers therefore pleaded with NAICOM to endeavour to publish on a
regular basis, the names of insurance broking firms qualified to practice
reinsurance broking in accordance with the provisions of the law.
In a similar vein, the reinsurers alleged that the Chartered
Insurance Institute of Nigeria (CIIN) has now made reinsurance subjects
optional for students writing the institute’s examinations, indicating that a
student can pass through all the stages leading to the award of CIIN Diploma
without having a good knowledge of reinsurance.
The CIIN was therefore enjoined to ensure that any student
aspiring to be a chartered insurer in the country passed at least the
principles of reinsurance.
Source: Daily Independent
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