NIC cautions insurance intermediaries against breach of new Insurance Act
The National Insurance Commission (NIC), has cautioned unlicensed insurance intermediaries in the country against soliciting fees, commissions, and or other remuneration from insurance companies in exchange for providing the latter with customers.
In a public notice issued on the website of the NIC, the Commission states that, soliciting fees, commissions, and or other remuneration from insurance companies in exchange for providing insurance companies with customers, is the preserve of licensed insurance intermediaries.
According to the NIC, it is a breach of section 109 of the Insurance Act, 2021 (Act 1061) for an individual or corporate body to carry on or purport to carry on business as an insurance intermediary without a license from the NIC.
Individuals or corporate bodies unlicensed as insurance intermediaries, the NIC states, are liable to a term of imprisonment of not less than two (2) years and not more than five (5) years; or are liable to pay the Commission an administrative penalty of not less than 2,500 penalty units and not more than 10,000 penalty units when found out by the Commission.
A person is considered to carry on business as an insurance intermediary in the country if that person by way of business as an insurance intermediary, occupies premises in the country or invites another person in the country or causes another person to be invited as a customer through an advertisement or otherwise.
A person purports to carry on business as an insurance intermediary where that person uses any name, style, designation, description, title or trade mark that represents or implies that the person is an insurance intermediary, whether or not that person has been issued a licence for that purpose.
Read details of statement on the NIC’s website
Public Notice – Caution Against The Breach Of Sections 109, 142 And 145 Of The Insurance Act 2021, (Act 1061)
The attention of the National Insurance Commission (NIC) has been drawn to the soliciting of fees, commissions and / or other remuneration by entities not licensed by the NIC, from insurance companies in exchange for the performance of the following:
1. Referring clients, customers or any other person whether individual or corporate to the insurer.
2. Soliciting insurance business for the insurer.
3. Inviting another person or causing that person to be invited as a customer through an advertisement or otherwise.
4. Performing any other function of an agent assigned to that person by the insurer.
5. The performance of any other function with respect to insurance.
The above-mentioned activities, for which fees, commissions and / or other remunerations are solicited and paid are the preserve of insurance intermediaries duly licensed by the National Insurance Commission (NIC) for that particular purpose.
This notice shall serve to issue a caution to BANKS, other FINANCIAL INSTITUTIONS and the general public that per Section 109 of the Insurance Act 2021, (Act 1061), it is a breach of the law to carry on or purport to carry on business as an insurance intermediary unless that person or body corporate holds a licence issued by the National Insurance Commission (NIC) for that purpose.
A person is considered to carry on business as an insurance intermediary in the country if that person by way of business as an insurance intermediary, occupies premises in the country or invites another person in the country or causes another person to be invited as a customer through an advertisement or otherwise.
A person purports to carry on business as an insurance intermediary where that person uses any name, style, designation, description, title or trade mark that represents or implies that the person is an insurance intermediary, whether or not that person has been issued a licence for that purpose.
Per Section 109 (4), a person who carries on or purports to carry on business as an insurance intermediary when that person is unlicensed for that purpose is:
1. Liable to a term of imprisonment of not less than two (2) years and not more than five (5) years or,
2. Liable to pay the Commission an administrative penalty of not less than 2,500 penalty units and not more than 10,000 penalty units.
ALL REGULATED ENTITIES OF THE NATIONAL INSURANCE COMMISSION (NIC), VIZ; REINSURERS, INSURERS AND INSURANCE INTERMEDIARIES ARE ALSO HEREBY CAUTIONED AND SHOULD BE GOVERNED ACCORDINGLY
