The National Insurance Commission has barred all underwriting companies from selling their products through the banks and other financial institutions.

The Commissioner for Insurance, Mr. Mohammed Kari, said this during the investiture ceremony of the Managing Director, Consolidated Hallmark Insurance Plc, Mr. Eddie Efekoha, as the 22nd chairman of the Nigerian Insurers Association in Lagos.

Kari said that the commission had been in discussion with the apex bank on the bancassurance (selling insurance products through bank networks) distribution channel for some time now.

“However, in a letter received last week, the CBN asserted that NAICOM was not in a position to license banks and thus we could not go ahead with the arrangement for now,” he said.

The commissioner said that NAICOM would continue to engage the CBN until all the grey areas were resolved.

Kari added , “The second, however, is that from today, all relationships the commission had hitherto accommodated where insurance companies paid commission/fees to banks for insurance transactions, referral or introduction in any guise are no more valid.

“Insurance companies utilising or intending to utilise any institution including banks, airlines, online or web-based aggregators shall ensure that those institutions have been licensed by the commission as we have resolved to ensure strict compliance and impose appropriate sanctions on  erring insurance institutions. You are warned accordingly.”

The commissioner said that the NIA made a right choice of leadership by choosing Efekoha to lead the association in its efforts to take the industry to greater heights.

Kari assured Efekoha of his support, adding that he was ready to work with the new NIA.

“It is on the strength of all these and his enviable track record of being one of the good guys in the industry that gave me the confidence to say that the NIA is indeed in safe hands,” he said.

The Managing Director, Niger Delta Exploration and Production Plc, Dr. Layi Fatona, commended the NIA for its choice of leadership, adding that Efekoha would make a good impact on the industry.

Fatona, who was also the chairman of the occasion, said that if the industry set a target for itself, it would be able to contribute better to the economy because the insurance sector had huge potential.

Fatona said he was worried that despite the huge premium that was placed yearly on oil and gas business, most of the premiums were going to foreign reinsurers.

He challenged the underwriters to develop stronger capacity that would help them retain more premium in the country.