NAICOM engages stockbrokers as referral agents

In a bid to deepen insurance penetration in the country, the National Insurance Commission (NAICOM), the regulator of the insurance sector in the country, at the weekend, announced that it would engage the services of stockbrokers as referral agents in the insurance distribution channel.

A referral agent refers prospective consumers of brokerage services to their employing broker or broker-of-record.

The Commission stated this when it paid a working visit on the Director-General, the Securities and Exchange Commission (SEC), which regulates the capital market, Mounir Gwarzo. The purpose is to outline the role of stockbrokers in the sales of insurance product as being
limited to referral partners/agents to the insurance companies without being exposed to any risk.

The Deputy Director, Authorisation and Policy, Leonard Akah, who led the NAICOM delegation, said the stockbrokers would earn a percentage commission on any business they
are able to generate for the insurance company.

This initiative, according to him is expected to create opportunities for stockbrokers that are interested without distracting them from carrying out their core functions, adding that the draft guidelines to ensure seamless operation of this initiative will be sent to SEC for input before the final exposure.

Responding, the Director-General, represented by Isyaku Bala Tilde, Head Monitoring Department, thanked NAICOM for this initiative and promised to collaborate with the Commission to ensure its smooth execution.

The Commission has also identified other professionals for consideration in the referral agency model. These include accountants, lawyers and a host of others.