BANCASSURANCE REFERRAL OPERATIONAL …

1 BANCASSURANCEREFERRALOPERATIONALGUIDELIN ESNATIONALINSURANCECOMMISSIONEFFECTIVEAP RIL1, 20171 TABLEOF Operationand ,Fees,Commissionsand Licenceand ,Remedialmeasuresand DEFINITIONI nthiseGuidelines,unlessthecontextotherwi serequires:ApplicantApprovalAssociatedCo mpanyBancassuranceBancassuranceManagerBa ncassuranceProductBancassuranceReferralB ankBancassuranceReferralOfficerCBNActCII NActCommissionConventionalProductsDeskOf ficeBranchDeskOfficermeansindividualorin stitutionwitha validinsurancelicenceapplyingtotheCommis siontocarryoutBancassuranceReferraldistr ibutionModelmeansNAICOM grantofnoobjectionorapprovalfortheInsure rtoenterintoreferralrelationshipwithname dbank(s)."Noobjection"and"Approval"areth ususeinterchangeablyin ,ParentCompanyorotherCompanyinthesamegro upmeansthecollaborationbetweena , bankpermittedbyCBNtoactasa referralBancassurancebusinessunderthisGu idelinesThisis theBancassurancedeskofficerin BancassurancecustomersmeansGross PremiumIncomemeansthe Insuranceindustryof Nigeriacomprisingthe , Adjusters,and all other Operatorscapturedbythe NAICOMAct 1997and the InsuranceAct 2003meansthe InsuranceAct of 2003meansany life or non-lifeinsurancepolicy sold to or purchasedbyindividuals,familiesand corporateentitiesfor their own benefitsmeansa licencedInsuranceUnderwriterthat sells its productsthroughthe platformprovidedby a Bankmeansthe NationalInsuranceCommissionAct of 1997meansthe NigerianDepositInsuranceCorporationmeans the premiumaccountof the insurersituatedin the referralbankor otherbanksfor recordingbancassurance( REFERRAL )

2 Transactionsmeansthe PensionReformAct of 2014meansbancassuranceagreementexecutedb etweenthe insurerandreferralbankmeansa BancassuranceModelas indicatedunder the CBN andNAICOMB ancassuranceGuidelinesrespectively,where byInsuranceproductsare distributedthroughinsuranceexpertswho are generallyemployeesor representativesof an Bank,whichis partneringwith the insurancecompany,shall throughitsemployeesidentifyprospectswho are then contactedby an this case, the InsuranceCompanyleverageson theCustomerdatabaseof the Bank for insuranceneeds assessmentandprovisionof the requiredinsuranceproductssubjectto Section2 ofthis Guidelinesmeansa DepositMoneyBank (DMB)and/orMicrofinanceBank(MFB)approved to collaboratewith an approvedInsurerto sell theInsurer'sProducts,usingthe be marketedandReferralarrangementsbetweenIn surerand Referra4 SMES tandstillPeriodmeansSmallor Medium-SizedEnterprise,beinga businessorcompanythat has employeesnot exceeding100 and sharecapitalnot exceedingN300 millionin contextto theseGuidelinesmeansthe periodfor whichan insurancebusinesswith an existingintermediaryshall be allowedto changethe distributionchanneltobancassurancemodela nd suchchangeshallbe with a writtenauthorityof the insurerwhichshall bewell documentedby the wordsand expressionsused hereinbut not definedherein,or in any of the regulationsmadeby the Commissionor other Acts hereinreferredshall have the meaningsas definedinthe InsuranceAct 2003 or any NationalInsuranceCommissionby the powersconferredon it by the provisionsof section49 (1)(b)

3 Of NationalInsuranceCommissionAct 1997 herebyissue the followingGuidelinesonlicensingand operationof ReferralDistributionchannel- Bancassuranceas an Applicationfor Issuanceof "No Objection"by NAICOMto InsuranceCompaniesshall beaccompaniedwith the intentionby InsuranceCompaniesto partnerwith a Boardresolution/approvalfor such to establishmentof BancassuranceDepartmentby the ,designationand qualificationof officebranchesin the referra~bank,proposedDeskOfficerto man the deskoffices,their qualificationand/orexperiences(whereappl icable). managementframeworkput in of products(conventionalproductsof the Insurerto be sold underthe BancassuranceReferral). of namesand qualificationof proposedPrincipalOfficers(BancassuranceM anagersandBancassuranceReferralOfficers) . The insurerapplicationshall be accompaniedwith the referralagreementwith the referralbank,The contentsof this agreementshall be, at a minimum,includeitems ofthis ,3 NAICOM shallapprovethe ReferralBancassuranceAgreementbetweenthe BankandInsuranceCompany,subjectto obtainingreferencesfrom the CentralBank of Nig.

4 CONTENTSOF The be eachof the partiesunderthe agreementduringanduponformationof the of productsunderthe conditionsfor the terminationof the the contractand whetherit is feesto be the bankto establishDeskofficeif operationof the partnership(Referto Section6 of this Guidelines) that the productsshallbe underwrittenby the insurancecompanywithnorecourseto the bankin termsof underwriting,management,claimsor anylegalproceedingsbetweenthe Insurancecompanyand the bank' confidentialityof changingthe existingintermediaryon the CONSIDERATIONOF grantof an approvalor no objectionTheCommissionshall,beforegranti ngan approval,be his employmentthe minimumnumberof designatedPrincipalOfficerswhohavethe necessaryqualificationsspecifiedfromtime to timeby the Commissionand experienceto conductthe businessof FilingandapprovaVnoobjectionfeesrequirem entsas specifiedin grantof approvalto the applicantwill not be detrimentalto the interestof the _0' MODEOF by referringto the Insurer.

5 Bankcustomerthat requireinsuranceservicesand Bancassurancereferraloperiltionmightalso be by wayof locatingaBancassuranceDeskin the bankinghall of the Insurershallmaintaina Bancassurancerelationwith not morethan two ReferralBanksatanyonetime and vice ConductsThe insurerapprovedto partnerwith a ReferralBankshall; engagethe referralbankin any formof marketing,salesor the customersso referredthat the insurerwill whollybe liablefor underwritingof the risks,assessment,adjustmentand paymentof claimsthatmayarisefromthe use any advertisementor promotionthat wouldmakepeopleto mistakenlybelievethat theReferralBankstandsbehindor guaranteesany retumon the pay compensationto any individualfor the referralof a customerwheresucha personisnot an fail to disclosein writingto the Customerthat the Insurancepolicyto be sold is:i. not a cashdepositii. not Insuredby the NDIC andiii. not guaranteedby the enterinto a ReferralArrangementwith morethantwo fail to keepdistinctand separate,the recordsrelatingto Bancassurancetransactionsandthat, suchrecordsare to be madeavailableto NAICOMas and madeany paymentto the referralbankby whatevernamecalled(fees,charges,etc.)

6 Overand abovethe pay feesor commissionfor the insuranceof a policyholderthat is not a referralclientonthe referralclientlist maintainedin the prospectiveclientsare allowedto decideout of theirownvolition,whichinsuranceproductth ey wishto buy and fail to openand maintaina dedicatedpremium/operationalaccountfor the purposeofcapturingbancassurance( REFERRAL ) standstillperiodof oneyearfor an account/businessthathavean existingintermediarybeforea changeto Bancassurancereferralis be accommodatedwith evidenceof a writtenapprovalfrome engagein any bancassurancereferralrelationwitha bankfromthe sameHold-Coorgroupstructurewherebrokersi s also a allowany businessthathas beentreatedas a bancassurancereferralmodelto becapturedconcurrentlyto havebeenthroughany otherintermediaries(agentor broker)norallowpaymentof anothercommissionon Bancassurancereferralarrangementshallsat isfyotherprovisionsof businesspracticeand marketconductsas provideby Guidelinesissuedby the PREMIUMfTRANSACTIONACCOUNTS,FEES, Insurerto NAICOMA pplicationlfilingfee by the Insurerlicensingand registrationfee by the InsurerRenewalfeesN500, ,500, ,000, BancassuranceReferraUPartnerThe ReferralCommissionto be paid by the Insurerto ReferralBankshallnot exceed40%of theCommissionallowedin the InsuranceAct, 2003for Insurerpartneringwith a Bankshallopenand maintaina dedicatedpremiuma=untwtththe referralBankand any otherbankof tts expendttureor cost arisingout of the Bancassurancerelationshipbetweenthe Insurerandthe ReferralBankshallbe chargedto this accountexceptthe premiumunderBancassuranceoperationshallb e guidedby Section50(1)

7 Of theInsuranceAct 2003whichsays"the receiptof an insurancepremiumshallbe a conditionprecedentto a validcontractof insuranceand thereshallbe no coverin respectof aninsurancerisk, unlessthe premiumis paid in advance". paidby the debttof a policyholder'saccountby instructionof thepolicyholderto the bank,the bankshouldcredttthe a=untstatedin the VALIDITYOF approvalonceissuedto the insurershallbe validfor a periodof two calendaryearsfromthe date of tts issue,unlessthe sameis suspendedor cancelledpursuantto the renewalapplicationand documentationshallbe submittedat least45 dayspriorto the dateof expirationof licenseand any renewalapplicationreceivedthereaftershal lattracta penattyof N250, expiration,the referralbankwouldbe notifiedthroughthe CBNand isexpectednot to transactfurtherbancassurancebusinessunti lthe licenseis Thirty(30) days'gracefromthe expirydatemaybe allowedfor renewalof the 30 daysgraceperiod,thereshallbe no renewaland a newreferralrelationshipapplicationmay only be consideredaftera coolingperiodof 2 renewalshallbe in suchformsas maybe prescribed,fromtime to time,by incompleterenewaldocumentsshallbe construedas or non-lifeinsuranceproductsstatedin the agreementbetweenthe Referralbankand the Insurersoldto or purchasedby individuals,familiesandcorporateenmiesfo r their own benefitsfroma InsuranceCompanyshallbe authorisedto sell Life doubt,Non-lifeproductswithoutrisk premiumcontent(investmentor annuity)

8 Orbondsand guaranteesin whateverformshallbe regardedas productto be coveredby the Referralrelationshallbe listedin the productshallbe addedto thoselistedon the approvedagreementwithouttheprior approvalof the 'sproductswhichhavealreadybeenapprovedby the Commissionbutwhichhavebeenrepackagedto makethemsuitablefor Bancassuranceoperationmustberesubmittedt o the Commissionfor approvalby the insurancecompanyTheprovisionsof Section54(2)of the InsuranceAct,2003mustbe clearlyindicatedin aconspicuousmannerat the frontcoverof the (repackagedor new)mustbe supportedwith a Prospectusand productso developedshallbe subjectto approvalof the BancassuranceManagershallbe the Headof the Insurer'sbancassuranceoperationsin theInsurer'sofficeand shallnot be belowthe levelof SeniorManageror its a BancassuranceManagershallincludethe the bancassuranceactivitiesin the insurer' all partnerbankandotherpartiesas wellas the regulatorin respectof kept,and that the necessaryretumsare madeas at treatmentof all permittedto act as BancassuranceDeskofficerin the ReferralBank'sofficeandsuchofficer(s)sha llcompriseof the requirementsof the relevantmarketconductsregulationsand the Insurershallbe an employeeon the payroll of the Insurer, responsiblefor all actsof commissionandomissionof the employeedeployedon a BancassuranceReferralOfficer(Insurance)s hallincludethe following:i.

9 Obtainingdetailedinformationaboutthe Customerand his Familiarisinghimselfwiththe client'sbusinessandunderwritinginformati onso thatthiscan be usedin the Renderingadviceto the customeron appropriateinsurancecoverand terms;iv. Maintainingdetailedknowledgeof availableinsuranceProductsfromhis company,v. Providingquotationon the InsuranceProductsfor considerationof a client;vi. Providingrequisiteunderwritinginformatio nto the Insurerin assessingthe risk to decidepricingtermsand conditionsfor cover,vii. Actingpromptlyoninstructionsfroma customerandprovidinghimwrittenacknowledg ementsof the assumptionof risk by the Complyingwiththe Guidelineon mar1<etconductandbusinesspracticefor InsuranceInstitutionsin Assistingcustomersin processingclaimsin linewiththeprovisionsof the"ClaimsManagementProcedureof the Companyrepresentedx. Assistingin the negotiationof the claims,protectingsalvageandsubrogationri ghtsof Maintainingproperrecordsof claimsand BANCASSURANCEOFFICERSTheBancassuranceMan agersandBancassuranceReferralOfficersare requiredto haveBancassuranceTrainingfor a periodof not lessthan12 hoursand18 the NigeriaCollegeof Insuranceshallbe sufficientevidencefor this in additionto the necessaryrelevantqualificationandexperie ncea Headof TechnicalDepartmentof insurancecompaniesneedtopossessfor BancassuranceManagerwhilethe BancassuranceReferralOfficermushaveatlea stfirst degreeor its BancassuranceReferralBankandthe ReferralBankand the Insureror any otherpersonenherin thecourseof his engagementin BancassuranceReferralactivitiesor otherwisemaybe referredtothe Commissionby the personso affected.

10 Andon receiptof the complaintor representation,the Commissionwouldexaminethe complaintandif foundnecessaryproceedto conductanenquiryor an inspectionor an investigationwnhthe involvementof CBNwherenecessary,intermsof any disputearisingout of Insurancetransactions,the jurisdictionof the Commissionshallprevailand the lawsapplicableto the insurancecontractsshallbe enforcedandinformationinthis regardshallbe communicatedto the CentralBankof in placean appropriatecomplaintsredressmechanismto ensurethatclient'sissuesare particularthe Insurershallfullycomplywnhthe"MarketCond uctGuidelinesand businesspractice"issuedby the its quarterlyretumsto the Commission,the amountof businessgeneratedon ,as a linenem,the totalpremiumgeneratedfromBancassurancebu sinessand the ,REMEDIALMEASURES& dateof commencementof thiseGuidelines,no Insurershallcarryout Bancassurancebusinesswnhoutobtaining'Let terof No Objection'fromthe theprovisionof the Guidelinesshallbe treatedin line withsec 36 (8) of the InsuranceAct, Commissiondeterminesthatthe insurers'non-compliancewnhthe provisionsof thisGuidelinesimpactsthe Company'sabilnyto identify,assess,manageandmnigatens risksin asystematicmanner,the Commissionmayissuesuchorderswhichn considersnecessarytoprotectpolicyholders 'interestin accordancewnhthe Commissiondeterminesthatan insurancehasnot metthe requirementsof thisGuidelines,the Commissionmayimposeany or all of the availableadministrativesanctionstocorrec tthe snuationin accordancewnhthe powersunderthe InsuranceAct,2003andNAICOMAct,1997andwhe ren involvedthe referralbank,CBNshallbe informedto Guidelineshallbe with effectfromApril1, any aspectof this Guidelinesshallbe referredto:Address:E-mail:Website:The Directorateof Authorisationand PolicyNationalInsuranceCommissionPlot 1239,LadokeAkintolaBoulevardGarkiII.