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The National Insurance Commission (NAICOM) has suspended bancassurance partnership deals between insurance companies and banks indefinitely following a dispute with the Central Bank of Nigeria.

Mohammed Kari, NAICOM’s Commissioner for Insurance/CEO, disclosed this on Tuesday during the investiture of Eddie Efekoha, the Managing Director/CEO of Consolidated Hallmark Insurance, as the 20th Chairman of the Nigerian Insurers Association.

Kari said the insurance industry regulator took the decision after the CBN refused to allow NAICOM issue licenses to banks for the provision of bancassurance services to bank customers. (Bancassurance is an arrangement in which insurance companies distribute their products through banking channels).

“From today [Tuesday], all relationships the commission had hitherto accommodated, where insurance companies pay commission/ fees to banks for insurance transactions, referral or introduction, in any guise is no more valid,” the NAICOM boss said. “You are warned accordingly.”

The NAICOM boss said the ban on bancassurance partnerships will remain in place until the two regulators agree on a workable model for such deals in Nigeria.

“The commission discovered that an insurance company had signed a 12-year partnership agreement with a bank, when it is supposed to be renewable every two years, this is wrong,” Kari said. “We also noticed that an insurance company had paid commission in advance to one of the banks, and this is abnormal.”

Kari said that the insurance regulator has also suspended the distribution of insurance products through channels such as airlines, online or web-based aggregators, telecoms companies, and other platforms not approved by NAICOM.

“Licensing such channels is imperative to protecting the consumers and also to ensuring ethical and orderly practice and in further protecting the credibility of the insurance sector which is the principal mandate of the commission. However, the employment of such channels can only be utilized if that institution is licensed by the commission, in line with the provisions of the extant law,” the NAICOM boss said.