By Rosemary Iwunze
The National Insurance Commission, NAICOM, has restricted standalone Insurtech firms from transacting special risk products.
The affected products include oil and gas insurance, marine and aviation insurance, retirement life annuity, and insurances of government assets and liabilities for Ministries, Departments, and Agencies, MDAs.
NAICOM relayed the restriction in the operational guidelines for Insurtech businesses in Nigeria released Tuesday which will take effect from August 1, 2025.
InsurTech, short for “insurance technology,” refers to the use of innovative technologies, such as artificial intelligence, big data analytics, blockchain, and machine learning, to improve and automate the traditional insurance industry.
On application and eligibility, NAICOM stated: “Prospective operators must submit applications in accordance with the procedures outlined in Schedule I of the Guidelines. NAICOM reserves the right to grant licenses with conditions deemed necessary under existing laws and this new regulatory framework.
“Prudential and Market Conduct Requirements: Insurtech firms must comply with provisions related to risk management, investment practices, actuarial standards, outsourcing, and other key operational parameters as detailed in the Commission’s Prudential Guidelines.
“Dispute Resolution Mechanism: Disputes between Insurtechs and partner insurers must first follow arbitration protocols outlined in their agreements before approaching NAICOM. Consumers may refer unresolved issues from insurance transactions directly to the Commission for review and resolution.
“Compliance Deadline: All existing insurance institutions and Insurtech firms operating under any arrangement classified as Insurtech must fully comply with these Guidelines within 30 days of the effective date.”
NAICOM noted that the guidelines aim to: Foster innovation that can lead to the development of new and innovative insurance products and services; Ensure consumer protection and improve consumer experience, prioritizing consumer interests and providing better services; Provide clarity on regulatory requirements, reducing uncertainty and ambiguity; Help build trust and confidence in the Insurtech sector, driving growth and adoption; as well as advance digital transformation within the Nigerian insurance sector.
NAICOM also stated that the key objectives of the guidelines include: Promoting the growth and development of Insurtech in Nigeria; Establishing regulatory standards for Insurtech setup and operations; Encouraging responsible innovation while safeguarding consumer interests; Defining general product features specific to Insurtech.
Other are providing a licensing structure for both Partnering and Standalone Insurtech firms; Facilitating the transition of eligible operators into fully licensed standalone Insurtech entities; as well as Supporting Nigeria’s broader digital economy and fintech ecosystem.
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