From Uche Usim, Abuja

The National Insurance Commission (NAICOM) has released a guideline for web aggregators wherein it mandated each of them to possess and maintain a professional indemnity insurance cover of N20 million or 50 per cent of their respective annual gross commission income (whichever is higher) throughout the validity period of the licence granted by the Commission.

Each of them is to pay a non-refundable application fee of N500,000, Licensing fee of N2,500,000 and a renewal fee of N1 million.

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

NAICOM further stated that the indemnity cover shall be on a yearly basis for the entire period of its licence. It advised them to conduct their dealings with clients with utmost good faith and integrity at all times and act with care and diligence.

Web aggregators are to ensure that the client understands his/her relationship with the web aggregator and on whose behalf the web aggregator is acting; treat all information supplied by the prospective clients as completely confidential to themselves and to the insurer(s) to whom the business is being offered; take appropriate steps to maintain the security of confidential documents in their possession; understand the type of client it is dealing with and the extent of the client’s awareness of risk and insurance; treat the client fairly and avoid conflict of interest; and draw the attention of the client to Section 76 of the Insurance Act 2003, which prohibits rebating and sharing of commission.

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Web aggregators are to have in place a system for recording and monitoring complaints; accept complaints electronically and in writing etc.

NAICOM, however, warned that it will wield the big stick where it detects non-compliance with provisions of the guidelines.

“The Commission may appoint one or more of its Officers or Information Technology Experts as inspecting authority to undertake inspection of the premises of the Web Aggregator to ascertain and see how activities are carried on and also to inspect the books of account, records, and documents of the Web Aggregator for compliance purpose.

“The Commission may cancel the licence granted to a Web Aggregator or take any other action as deemed appropriate under the Act in case of failure to exercise due diligence or comply with its obligations in this Guidelines or such other directives issued by the Commission

“The Commission will also impose any or all of the available administrative sanctions in accordance with the powers under the NAICOM Act 1997 and the Insurance Act 2003”, it said.