What is the National Insurance Commission (NAICOM) & Functions

A lot of people have been asking the question of what is the National Insurance Commission NAICOM and it’s function. If you’re one of those people, then this article is an eye-opener.

Consider an oversight organisation overseeing all matters related to insurance in Nigeria. That’s what the National Insurance Commission (NAICOM) does! It ensures that insurance providers are held accountable, protects you, the policyholder, and maintains the integrity of the insurance industry as a whole.

This article will answer all your questions about NAICOM, its function, and how it keeps your insurance safe and sound.

THE NATIONAL INSURANCE COMMISSION NAICOM – HISTORY AND OVERVIEW

The National Insurance Commission, often known as NAICOM, oversees the administration and activities of insurance in Nigeria. The Act of 1997 guarantees the general management and oversight of Nigeria’s insurance industry.

Every professional sector should naturally have an established authority that oversees its conduct.

Essentially, the Chartered Institute of Personnel Management [CIPM] oversees the profession of human resources in Nigeria, whereas the Financial Reporting Council of Nigeria establishes accounting standards. This emphasises the idea that monitoring pertaining to certain professions is supervised by established organisations.

Aside from this, the insurance industry also has a regulatory agency. In addition, policyholders who are members of the general public, beneficiaries, and third parties to insurance contracts are protected by NAICOM.

FUNCTIONS, OBLIGATIONS AND MANDATES OF NAICOM

The NAICOM Act of 1997, the enabling statute, outlines the following duties of the National Insurance Commission:

• In essence, NAICOM sets guidelines for how the insurance industry in Nigeria should operate.
• It authorises insurance premium rates that must be paid for all forms of insurance activity.
• It also makes sure that other properties and other government assets are adequately protected.
• It controls the exchange of information between reinsurers and insurers both within and outside of Nigeria.
• It also advises the federal government on all issues pertaining to insurance.
• Standards, terms, and guarantees that apply to all insurance business classes are approved by NAICOM.
• It also protects beneficiaries, third parties to insurance contracts, and insurance policyholders.
• It releases data and yearly reports on the insurance sector.
• Additionally, NAICOM provides advice and communication on insurance-related issues to Federal Ministries and other Government Agencies. Any technical agreements that Nigeria has signed may include this.
• Moreover, it supports the educational initiatives of the West African Insurance Institute and the Chartered Insurance Institute of Nigeria.
• Lastly, NAICOM does additional similar tasks related to or incidental to its other Act-mandated duties.

OPERATIONAL MANAGEMENT AT NAICOM

NAICOM is divided into three divisions. We will list the embedded departments under each.

COMMISSIONER FOR INSURANCE’S DIVISION LEGAL AND BOARD SECRETARIAT

A key function of the National Insurance Commission of Nigeria (NAICOM) is the Commissioner for Insurance’s Division, which oversees and develops the insurance sector in Nigeria. The directorates you listed generally manage the following tasks, however exact duties may differ:

LEGAL AND BOARD SECRETARIAT:

• Offers counsel and assistance in matters of law to NAICOM and the Commissioner.
• Oversees the Board of Directors, including scheduling and meeting content.
• Oversees adherence to relevant laws and rules.

CORPORATE AFFAIRS:

• Manages NAICOM’s communication and public relations.
• Oversees the Commission’s reputation and brand.
• Oversees the involvement of industry groups, insurers, and policyholders among other stakeholders.

AUDIT:

• Examines NAICOM’s finances and operations both internally and outside.
• Assures adherence to best procedures and financial rules.
• Finds and reports on hazards and areas that might want improvement.

PROCUREMENT:

• Oversees NAICOM’s purchases of products and services.
• Guarantees equitable and open procurement procedures.
• Maximise expenses and financial return.

INFORMATION TECHNOLOGY:

• Creates and puts into place NAICOM’s IT systems and infrastructure.
• Offers IT assistance to all employees of the Commission.
• Assures the integrity and security of data.

RESEARCH, STATISTICS, AND CORPORATE STRATEGY:

• Performs studies and investigations into the Nigerian insurance market.
• Creates and oversees the strategy plan for NAICOM.
• Gathers and evaluates information on the insurance industry’s performance.
• Provide data and insights to help with regulatory decision-making.

All of these directorates report to the Commissioner for Insurance, who also bears ultimate accountability for the Division’s operations.

The Division is essential to maintaining the financial stability of insurance businesses, safeguarding customers, and encouraging healthy competition in the market.

TECHNICAL DIVISION

The Technical Division manages NAICOM’s main regulatory tasks to guarantee Nigeria’s insurance business is safe, sound, and efficient.

It consists of one unit and four major directorates:

INSPECTORATE DIRECTORATE:

• The directorate examines insurance businesses both on and off site to evaluate their risk management procedures, financial standing, and adherence to legal requirements.
• Assesses possible hazards and the soundness of insurance business.
• They reports to NAICOM and makes suggestions for any required remedial action or enforcement actions.

AUTHORIZATION AND POLICY DIRECTORATE:

• They are charged for granting licences and authorising insurance firms, brokers, agents, and other intermediaries in the insurance industry.
• Creates and evaluates rules, standards, and insurance policies.
• It gives NAICOM technical guidance on issues pertaining to insurance.

SUPERVISION DIRECTORATE:

• They keeps an eye on insurance businesses’ continuous activities to make sure they stay financially stable and comply with regulations.
• Examines the financial accounts, actuarial reports, and other pertinent data that insurance firms have provided.
• They identifies trends or hazards facing the insurance sector by conducting thematic evaluations on certain facets of the business.

ENFORCEMENT AND COMPLIANCE UNIT:

• This unit looks into and prosecutes violations of insurance laws and regulations by insurance firms or people.
• It imposes appropriate punishments, such as fines, licence suspensions, or other penalties.
• They encourage just and moral behaviour in the insurance sector and discourage noncompliance.

COMPLAINT BUREAU UNIT:

• They takes in and looks into complaints against insurance firms or intermediaries from policyholders and other interested parties.
• They aids in the settlement of conflicts between insurance companies and customers.
• They defends the interests of policyholders and encourages consumer protection in the insurance industry.

Together, these divisions guarantee that NAICOM carries out its responsibility to efficiently regulate the insurance sector, safeguard policyholders, and advance a solid and stable insurance market in Nigeria.

FINANCE AND ADMINISTRATION DIVISION

The National Insurance Commission’s seamless functioning and financial stability are greatly dependent upon the work of NAICOM’s Finance and Administration Division. It is divided into three primary units:

FINANCE AND ACCOUNTS:

• This department maintains tabs on all earnings and outlays for NAICOM, guaranteeing precise and current financial data.
• They provide formal reports that give a clear picture of NAICOM’s financial situation, such as income statements and balance sheets.
• They distribute and oversee the usage of monies authorised for various NAICOM departments and initiatives.
• They handle excess money in a manner that brings in more money for the commission.

ADMINISTRATION AND HUMAN RESOURCES:

• To guarantee efficient daily operations, this division manages general office duties, purchasing, travel plans, and other administrative requirements.
• They manage all aspects of NAICOM employee relations, payroll, benefits, recruiting, training, and development.
• They oversee the care and maintenance of NAICOM’s equipment and office buildings.

THE SERVICOM UNIT:

• This unit serves as the main point of contact for questions and issues from policyholders, insurance providers, and other stakeholders.
• They receive and look into complaints about insurance services, making sure that they are resolved fairly and promptly.
• The goal of the Servicom section is to increase public accountability and transparency in NAICOM’s activities.
• They work tirelessly to improve the effectiveness and quality of services offered by NAICOM.

Essentially, the Finance and Administration Division serves as the backbone of NAICOM, providing strong financial management, effective administration, and attentive customer service to support its regulatory and supervisory tasks.

CONCLUSION

In a nutshell, as seen on the NAICOM website, it protects Nigeria’s insurance sector in a guarded manner. They establish the guidelines, ensure that businesses act fairly, and shield you, the client, from any difficulties.

Thus, keep in mind that NAICOM is always there to support you and ensure that your coverage is robust and dependable the next time you get insurance.