The sale of illegal insurance premiums in Nigeria is presenting a big problem for the country’s insurance industry. There are many illegal insurance agents and brokers, who collect the premium and produce documentations. Unfortunately these policies fail to pay out when a claim is made.
Such insurers and policies are making insurance buyers very nervous, and some avoid insurance altogether. In order to help grow the Nigerian insurance sector, the Association of Registered Insurance of Nigeria (ARIAN) is clamping down on these illegal operators.
The Association of Registered Insurance of Nigeria (ARIAN) has warned insurance agencies and their agents to register with the Chartered Insurance Institute of Nigeria (CIIN) as required by law. Any transaction of insurance related businesses without the appropriate license is illegal and offenders will be prosecuted.
ARIAN has warned that agents must be licensed and properly trained before being allowed to practice, insisting the association will fight fraud in the profession. According to section 34(1) of Insurance Act 2003, training is a pre-condition for agency licensing.
Insurance is not a business that can be entered into without sufficient training; there is need for understanding of the working of insurance hence the need for the training being offered by ARIAN. Training of the agents and the agencies is the statutory function of the Chartered Insurance Institute of Nigeria as the law mandated it to certify the agents before they can practice.
ARIAN is working hard to ensure insurance companies and agents are fully trained and certified before they enter the insurance business. Insurance awareness is low and insurance culture is still new in Nigeria but the institute has begun an awareness drive to further deepen the penetration of insurance in Nigeria.