In a bid to ensure ethical practices in the insurance of government assets and liabilities, the National Insurance Commission (NAICOM) has enjoined all ministries, departments and agencies (MDAs) of the government not to interact, engage, or transact any insurance business with any insurance firm unless the institution is duly licensed by it.
The NAICOM stated that any insurance institution that either fails or neglects to comply with any provision of the Guidelines for Insurance of Government Assets and Liabilities MDAs and Other Stakeholders, issued on October 28, 2023, shall be penalised, following extant insurance law and regulation.
This is in the guidelines, which NAICOM stressed that such penalty on non-performing operators could be extended to blacklisting the defaulters from handling government insurance and/or the suspension or withdrawal of their operating licenses, as the case may be.
Head, Corporate Communications and Market Development of NAICOM, ‘Rasaaq Salami, said that the multi-sectoral committee set up to oversee the full implementation of compulsory insurance which includes the government’s assets, has commenced meetings, stating that the committee has also raised four sub-committees to ensure easy implementation of the stipulated rules.
NAICOM also threatened to drag any ministry, department and agency of government that contravened the rules before the Secretary to the Government of the Federation to strengthen the implementation of the set guidelines.
NAICOM stated that it shall be illegal to inflate the premium payable by any MDA in respect of the insurance of the government assets and liabilities.
It added that MDA shall not pay premiums above the actual premium on an insurance policy that may result in a refund of the excess amount paid or with the intent of returning the excess in any form, by cash or otherwise to the insured, its agents, or any party thereafter.
NAICOM reiterated that any MDA that acts contrary to the regulation shall be deemed to have contravened the law.
“The individual officer(s) involved shall be deemed to have committed gross misconduct and may be reported to the appropriate authority,” the Act stated.
NAICOM stated that MDAs shall ensure that all government assets and liabilities in their custody/supervision are adequately insured at all times, stressing that all MDAs shall procure insurance cover for adequate protection of government assets and liabilities, including mandatory items to be insured that fall under compulsory insurance policies and that this would, however, be subject to budgetary appropriation by the MDA – approved budgetary provision.
It highlighted that MDAs shall provide information annually to the commission on all its insurances, adding that in compliance with the premium collection and remittance provisions in the market conduct guidelines, insurance cover for an MDA shall only be provided on a strict No Premium No Cover basis.
According to the Commission, MDAs shall effect payment of premiums to enable the renewal of their insurance not later than the effective date of the insurance contract.
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