As part of its effort towards ensuring financial inclusion in the country, the National Insurance Commission (NAICOM), says it will soon approve dedicated companies that will sell takaful and micro insurance products.
The Commissioner for Insurance, Mr Mohammed Kari said this at a workshop organised by the commission for Journalist over the weekend in Gombe North-east Nigeria .
Kari said that the products would ensure that everybody is carried along and actively participates in the financial sector in the country.
He explained that since the release of the regulations of micro insurance and takaful, companies had opted to use the window opportunities for the products
“But we have since got new applicants on direct dedicated takaful companies and we have already issued two takaful licences.
“We have just approved for one to commence on the final inspection before they commence their operations.
“They have submitted their product proposal and a meeting has been arranged for the technical advisory committee to look at them for the purpose of approving them.
“We believe that with the coming of the two, we will have to consider going forward; how long we should allow the windows to continue operating.
“In the last insurance committee meeting, the committee came up with proposals on developing micro insurance and but have still not accepted which one to take,” he said.
He said the commission had reviewed the released guideline in order to try and make micro insurance more micro for the people.
“Because the whole idea of micro insurance is to have the insured person very proximately located to the provider and you cannot have good micro insurance if the proximity is not there
“The claims processes will be as cumbersome as the conventional and that will defeat the aim, so we are considering increasing the level of licensing, which I believe we will conclude soon.
“And we may also consider conventional windows, indicated companies and so on because the market even proposed weather we should consider the Indian approach for micro insurance.
Indian does not issue separate licence for micro insurance, they compel every company to do a minimum of 20 per cent for micro insurance products.
The commissioner said that various proposals have been submitted regarding the approach to adopt and NAICOM would consider them and select the best that suits the Nigerian market.
Micro insurance is an insurance that is usually accessed by very low income earners in the society.
Takaful is an insurance, whose terms and conditions are in line with ‘Sharia Practice’, it is non-interest insurance.
The aim of the products is to ensure everybody is included so as to increase the contribution of insurance to the country’s Gross Domestic Product (GDP).