Desist from acting as middlemen for insurance companies – NIC to unlicensed financial institutions

Unlicensed financial institutions, corporate bodies, and individuals who act as middlemen for insurance companies are liable to face a jail term of not less than 2 years and not more than 5 years.

The National Insurance Commission (NIC) has noted that acting as intermediaries for insurance companies is a breach of section 109 of the new Insurance Act, 2021 (Act 1061).

It also stated if arrested, these institutions were also liable to pay the Commission an administrative penalty of not less than 2,500 penalty units and not more than 10,000 penalty units.

The Commission has therefore cautioned banks and financial institutions without a license against the act.

In a public notice according to graphic online reports, these institutions have been asked to stop soliciting fees, commissions, and or other remuneration from insurance companies in exchange for referring clients, customers, or any other person whether individual or corporate to the insurer.

“It has also asked them to desist from soliciting insurance business for the insurer, inviting another person or causing that person to be invited as a customer through an advertisement or otherwise; performing any other function of an agent assigned to that person by the insurer; and the performance of any other function with respect to insurance,” the report noted.

Watch the latest episode of BizTech below:







SSD/FNOQ