NAICOM Okays Foreign Reinsurance Contracts Renewal For Insurers
The National Insurance Commission (NAICOM) has granted approval to local insurance companies to renew their reinsurance treaties abroad regardless of the current lockdown in many parts of the country.
The approval was contained in a circular dated April 1, 2020 titled “Re: Effect of COVID-19 on Insurance Operations” and signed by the Director, Policy and Regulation, Mr. Pius T. Agboola The industry regulator said the policy directive was to ensure insurance operations are not grounded while the lockdown persists.
The circular stated: “Where approval-in-principle for the preceding insurance period had been granted, all renewals or extensions of the foreign reinsurance proportions that become due during COVID-19 movement restriction are permitted for renewal on existing basis.
“Where approval-in-principle for the foreign proportion of a new insurance placement is required during the COVID-19 movement restriction, it shall be treated on the basis of “Use and File” subject to prior exhaustion of in-country capacity.
“For the avoidance of doubt, after utilising available local capacity, the lead insurer is permitted to re-insure the excess of the risk offshore and submit relevant documentations to the Commission thereafter” NAICOM added.
The regulation further indicated that “all post placement reports, reinsurance treaties and other related special risk foreign reinsurance documentations due for submission during the pendency of the COVID-19 restrictions are to be submitted when movement restrictions are lifted.”
This is even as it stressed that all insurance/reinsurance placements shall be done in accordance with other relevant extant insurance laws, regulations and guidelines while all submissions to the Commission including hard-copies sequel to the above forbearance shall be done not later than seven days from the end of COVID-19 movement restrictions.”