National Insurance Commission has released “Insurance Web Aggregators Operational Guidelines” effective 1st February 2022 for all web aggregators and insurers to serve as a working document to register, supervise and monitor web aggregators as insurance intermediary who maintain a website for providing information on products of different insurers.
The registration for approval as a web aggregator goes through three stages detailing copy of no objection/approval by Nigerian Communications Commission (NCC) and six other listed requirements. Stage two lists organisational chart showing functional responsibilities, board resolution to commence a web aggregator operation and 12 other requirements including professional indemnity cover of not less N20 million.
NAICOM demands that “All insurance companies and web aggregators operating under any agreement of a business relation whether web aggregation business or otherwise shall comply with the provisions of this guideline within sixty (60) days of its coming into effect.” The guideline defined a web aggregator as a company registered under the Companies and Allied Matters Act of 1991 (CAMA) and approved by NAICOM “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.
Spelling out the registration process, NAICOM stated there are three stages; stage one begins with physical verification of web aggregator head office address and IT infrastructure to be deployed, followed by payment of licence fee and the ultimate, issue of licence.
The guidelines goes further on service level agreements (SLAs) stating that such ‘agreement’ with the insurer shall be filled with the Commission within 30 days for ratification and meeting all 16 requirements itemised.
On mode of operations the requirements is clear on professional indemnity which every web aggregator shall possess and continue to maintain a professional indemnity insurance cover with a minimum limit of liability of N20 million or 50% of its annual gross commission income (whichever is higher) throughout the validity period of the licence granted by the Commission.
The requirement further clears that the indemnity cover shall be on a yearly basis for the entire period of its licence. There are registration/renewal fees specified; first is, N500,000.00 non-refundable application fee; second, the licencing fee N2.5m. The third is renewal fee of N1 million payable after every two years.
However, the renewal application and documentation shall be submitted at least 45 days prior to the date of expiration of licence. The regulator also offers 30 days of grace following the lapse of licence to allow for renewal of licence and any business transacted after this period shall attract a minimum penalty of N1 million or 10 times the commission received on each transaction(s), whichever that is higher.