NAICOM commissions web aggregator to maintain N20m compensation cover

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From Uche UsimAbuja

the The National Insurance Commission (NAICOM) issued a guideline for web aggregators in which it required each of them to possess and maintain professional liability insurance coverage of N20 million or 50% of their gross commission income respective annuals (whichever is greater) throughout the validity period of the license granted by the Commission.

Each must pay a non-refundable application fee of N500,000, license fee of N2,500,000 and renewal fee of N1 million.

A web aggregator is a company registered under the Companies and Related Matters Act No. 1 of 1991 “CAMA” approved by NAICOM under this directive, which maintains/owns a website and uses information relating to insurance products and price/features comparisons of products from different insurers and offers leads to an Insurer.

NAICOM further stated that indemnification coverage will be annual for the duration of its license. He advised them to conduct their relationships with clients with the utmost good faith and integrity at all times and to act with care and diligence.

Web aggregators must ensure that the customer understands its relationship with the web aggregator and on whose behalf the web aggregator is acting; treat all information provided by potential clients as completely confidential to themselves and to the insurer(s) to whom the activity is offered; take appropriate measures to maintain the security of confidential documents in their possession; understand the type of client they are dealing with and the client’s level of risk and insurance awareness; treat the client fairly and avoid conflicts of interest; and draw the customer’s attention to section 76 of the Insurance Act 2003, which prohibits the reimbursement and sharing of commission.

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Web aggregators must set up a system for registering and monitoring complaints; accept complaints electronically and in writing, etc.

NAICOM has warned, however, that it will wave the big stick when it detects non-compliance with the provisions of the guidelines.

“The Commission may appoint one or more of its officers or information technology experts as the inspecting authority to undertake inspection of the web aggregator’s premises to ascertain and see how business is being carried out and also to d ‘Inspect web aggregator’s books, records and documents for compliance.

“The Commission may revoke the license granted to a web aggregator or take such other action as it deems appropriate under the law for any failure to exercise due diligence or fail to comply with its obligations in these guidelines or any other directive issued by the Commission.

“The Commission will also impose some or all of the administrative penalties available pursuant to powers under the NAICOM Act of 1997 and the Insurance Act of 2003,” she said.

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