The National Insurance Commission (NAICOM) has said it will within the second quarter of this year, release the new minimum capital base for the four different operational levels of micro insurance business across the country.
The Commissioner for Insurance, Alhaji Mohammed Kari, who disclosed this during a courtesy visit to THISDAY Corporate Head Quarters in Lagos said it was in line with the recommendations of the micro insurance review committee set up by government after the national micro insurance forum held in the country two years past.
Kari said his office has received the committee’s report and that in line with the recommendations, he has plans to stagger the micro insurance capitalisation licensing exercise into four different levels of operations.
He said this will include operators licensed for unit operation, those licensed for state operation, regional operation and national operation.
According to him, each of these operators will have different capital base while the unit licensed operators will have lowest capital.
According to him, with the unit operators, the industry hopes to reach market men and women even in the local markets across the country.
“Once you are licensed, you can decide to have an office without chairs and air condition because if you have a unit license set up in Ajegunle, you don’t need to have a poach office as long as you will be there for the consumer to walk in on daily basis and receive your services.”
“If you have a license to operate near a market, all you need is to stay close to the market where consumers will deal with you on daily bass and if they have issues, you will be there always to attend to them. So you don’t need the kind of capital a conventional company will need to operate from Victoria Island”, he explained.
Furthermore, he explained that the unit operators will have lowest capital, followed by state operators, regional operators while the national operators will have highest capital.
He also said there will be difference in their structure; the unit license operator will have only one operational branch, the state operator will have minimum number of local governments to cover, the regional also minimum number of states to cover in the region while national operators will also have minimum number of states around the country to cover.
For Takaful insurance, which is micro insurance that is in line with Islamic sharia principle, the commissioner said similar structure applies.
According to him, the commission has already received two applications from the public for specific specialist companies who want to operate the business.
He said the commission has received good comments from public on the applications while more would-be-operators have been coming for enquiries for Takaful insurance operation.
Prior to now, the issue of minimum capital base for micro insurance operations had generated a lot of controversy and criticism from the general public especially from insurance agents, who were from the onset looked upon as the key people that will operate the micro insurance firms.
Stakeholders had opined that the N350 million, N200 million and N150 million minimum paid-up share capital for Intending Composite, General and Life Micro Insurance operators put up by the outgone Fola Daniel’s administration in the Commission are too high and scary to intending operators of the micro insurance business