No 1 of  1997

Establishment, Etc. of the National Insurance Commission and its Governing Board

No 1 of  1997

Establishment, etc. of the National Insurance Commission and its Governing Board

1.     (1)            There is hereby established a body to be known as the National Insurance Commission (in this Decree referred to as "the Commission").

(2)            The Commission shall be a body corporate with perpetual succession and a common seal and may sue and be sued in its corporate name.

(3)            Subject to the Land Use Act and this Decree, the Commission may acquire, hold or dispose of any movable or immovable property for the purpose of its functions under this Decree.

2.     (1)            There is hereby established for the Commission a Governing Board which shall be responsible for managing and superintending the affairs of the Commission and consist of -

(a)             a part-time Chairman;

(b)             a representative each of -

(i)              the Federal Ministry of Finance not below the rank of a Director,

(ii)             the Central Bank of Nigeria not below the rank of a Director,

(iii)            the Chartered Insurance Institute of Nigeria,

(iv)            the Federal Ministry of Commerce and Tourism;

(c)             three part-time members to represent the interest of the public;

(d)             the Commissioner of Insurance; and

(h)             the two Deputy Commissioners of the Commission.

(2)            The Chairman and members of the Commission other than ex-officio members shall be appointed by the Head of State, Commander-in-Chief of the Armed Forces.

(3)            No member of the Board shall have the right to appoint any proxy to represent him at a meeting of the Board.

(4)            The supplementary provisions set out in the Schedule to this Decree shall have effect with respect to the proceedings of the Board and the other matters mentioned therein.

3.     (1)             A member of the Board appointed, otherwise than by office, shall hold office for a period of four years, and subject to the provisions of subsection (2) of this section, may be re-appointed for one further period of four years and no more.

(2)             A member of the Board, other than an ex-offico member, shall cease to be a member of the Board if -

(a)            he resigns as a member of the Board by notice in writing under his hand addressed to the Head of State, Commander-in-Chief of the Armed Forces;

(b)            the Head of State, Commander-in-Chief of the Armed Forces is satisfied that it is not in the interest of the Commission for the person appointed to continue in office and notifies the member in writing to that effect; or

(c)             he is removed from office under section 4 of this Decree.

4.     (1)            If it appears to the Minister that the Chairman or any other member of the Board, other than an ex-officio member, should be removed from office on the grounds of misconduct or inability to perform the functions of his office, the Minister shall make a recommendation to the Head of State, Commander-in-Chief of the Armed Forces.

(2)            If the Head of State, Commander-in-Chief of the Armed Forces approves the recommendation, the Minister shall, in writing, declare the office of the member vacant.

5.             The Chairman and other members of the Board shall be paid such allowances and incidental expenses as may be approved by the Federal Government from time to time.

Part II

(a)             establish standards for the conduct of insurance business in Nigeria;

(b)             approve rates of insurance premiums to be paid in respect of all classes of insurance business;

(c)             approve rates of commissions to be paid in respect of all classes of insurance business;

(d)             ensure adequate protection of strategic Government assets and other properties;

(e)             regulate transactions between insurers and reinsurers in Nigeria and those outside Nigeria;

(f)             act as adviser to the Federal Government on all insurance related matters;

(g)             approve standards, conditions and warranties applicable to all classes of insurance business;

(h)             protect insurance policy- holders and beneficiaries and third parties to insurance contracts;

(i)               publish, for sale and distribution to the public, annual reports and statistics on the insurance industry;

(j)              liaise with and advise Federal Ministries, Extra Ministerial Departments, statutory bodies and other Government   agencies on all matters relating to insurance contained in any technical agreements to which Nigeria is a signatory;

(k)             contribute to the educational programmes of the Chartered Insurance Institute of Nigeria and the West African Insurance Institute; and

(l)              carry out such other activities connected or incidental to its other functions under this Decree.

(a)            establish a bureau to which complaints, against any insurer, reinsurer, insurance broker or loss adjuster (in this Decree referred to as "insurance institution") may be submitted by members of the public;

(b)            requests or call for information from Federal Ministries, Extra-Ministerial Departments, statutory bodies and other Government agencies on matters relating to insurance;

(c)            borrow such sums of money as the Commission may, from time to time, require for performing its functions under this Decree;

(d)            acquire offices and other premises for the use of the Commission;

(e)            establish such zonal and other offices of the Commission as it may deem necessary for the proper performance of its functions under this Decree; and

(a)             to manage and supervise the affairs of the Commission;

(b)             for the overall policy and general administration of the Commission and act in the name of the Commission;

(c)             to recommend to the Minister, from time to time, the rates of contributions to be made by insurance institutions to the funds of the Commission; and

(d)             to do such other things and enter into such transactions which in its opinion are necessary to ensure the efficient performance of its functions under this Decree or any other enactment.

10.   (1)            There shall be for the Commission a Commissioner of Insurance (in this Decree referred to as "the Commissioner") who shall be appointed by the Head of State, Commander-in-Chief of the Armed Forces.

(2)             A person shall not be qualified for appointment as the Commissioner unless he has -

(a)             a recognized professional qualification in insurance or related course;

(b)             not less than 15 years post qualification experience in the insurance industry.

(3)             The Commissioner shall -

(a)             be the chief executive of the Commission; and

(b)             be responsible for -

(i)              the execution of the policies of the Commission as formulated by the Board,

(ii)             the day-to-day administration of the Commission; and

(c)            hold office for a period of 4 years in the first instance and may be re-appointed for a further period of 4 years and no more, and on such other terms and conditions, including emoluments and allowances, as may be specified in his letter of appointment.

11.   (1)            There shall be for the Commission -

(a)             a Deputy Commissioner of Technical Operations; and

(b)            a Deputy Commissioner of Finance and Administration, each of whom shall be appointed by the Head of State, Commander-in-Chief of the Armed Forces on the recommendation of the Minister.

(2)            A person shall not be qualified for appointment -

(a)             as a Deputy Commissioner of Technical Operations unless he has -

(i)             a recognized professional qualification in insurance or related course,

(ii)             not less than 12 years post-qualification experience in the insurance industry, and

(iii)            spent the last 7 years of the 12 years referred to in sub-paragraph (ii) of this paragraph at senior management level; or

(b)             as a Deputy Commissioner of Finance and Administration unless he has -

(i)             a recognized professional qualification in finance, accounting or administration;

(ii)             not less than 12 years post qualification experience in finance management and administration;

(iii)           spent the last 7 years of the 12 years referred to sub-paragraph (ii) of this paragraph at a senior management level.

(3)            The Deputy Commissioner of Technical Operations shall -

(a)             be responsible to the Commissioner for the day-to-day administration and coordination of all the technical operations of the Commission; and

(b)             perform such other duties as the Commissioner or the Board may, from time to time, assign to him.

(4)             The Deputy Commissioner of Finance and Administration shall -

(a)             be responsible to the Commissioner for the day-to-day control of the financial affairs and administration of the Commission; and

(b)             perform such other functions as the Commissioner or the Board may, from time to time, assign to him.

(5)            A Deputy Commissioner appointed under subsection (1)(a) or (b) of this section shall hold office for a period of 5 years in the first instance, and may be re-appointed for a further period of 5 years and no more and on such terms and conditions, including emolument and allowances, as may be specified in his letter of appointment.

(6)            When the office of the Commissioner is vacant or the Commissioner is for any reason absent or otherwise unable to perform his functions as Commissioner, the Minister shall appoint any of the two Deputy Commissioners to act as the Commissioner.

(7)            A Deputy Commissioner acting on behalf of the Commissioner under subsection (6) of this section shall perform all the functions and have all the rights and privileges of the Commissioner.

(a)             becomes of unsound mind or, owing to ill health, is incapable of carrying out his duties; or

(b)            is convicted of any offence involving dishonesty or any other offence the maximum penalty of which exceeds imprisonment for a term of 6 months; or

(c)            is guilty of a serious misconduct in relation to his duties under this Decree; or

(d)            is disqualified or suspended from practising his profession in Nigeria by order of a competent authority made in respect of him personally; or

(e)            becomes bankrupt or suspends payments or compounds with his creditors.

(a)            act as member of any body established by the Federal Government to inquire into any matter affecting insurance or other related matters in Nigeria; or

(b)             become a member of a body (whether corporate or unincorporate), by whatever name called, of any international insurance organisation or institution in which the Federal Government has interest or has given support or approval;

(c)             become a Director of any corporation in Nigeria in which the Commission may participate.

14.   (1)            Subject to sections 10 and 11 of this Decree, the Board shall, from time to time, appoint for the Commission such number of Directors and other employees as may appear to it expedient and necessary for the proper and efficient performance of the functions conferred on the Commission under this Decree.

(2)            The Commission shall pay its employees such remuneration and allowances, pensions and gratuities and other benefits as it may, with the approval of the Minister, determine.

15.   (1)            The Commission may, with the approval of the Minister, make rules relating generally to the conditions of service of employees of the Commission, and without prejudice to the generality of the foregoing, the rules may provide for -

(a)             the appointment and disciplinary control of all employees of the Commission; and

(b)             appeals by the employees against dismissal or other disciplinary measures.

(2)            Rules made under subsection (1) of this section need not be published in the Gazette but the Commission shall cause them to be brought to the notice of all affected persons in such manner as it may, from time to time, determine.

16.   (1)            The resources of the Commission shall comprise -

(a)             such sums of money as the Federal Government may, from time to time, to assign to it.

(b)             one per cent levy on every insurance institution;

(c)             income from investments of the Commission;

(d)             money borrowed from such sources as may be approved by the Board;

(e)             fees and penalties payable by insurance institutions and other persons; and

(f)             all sums of money accruing to the Commission by way of gifts, testamentary dispositions and endowments and contributions from any other source whatsoever.

(2)            The levy imposed under subsection (1) (b) of this section shall be based -

(a)            in the case of an insurer or a reinsurer, on its gross premium income;

(b)            in the case of an insurance broker, on its gross commission;

(c)            in the case of a loss adjuster, on its gross fees.

(3)            Every sum payable by any insurer, reinsurer, insurance broker or loss adjuster under this Decree shall be payable on or before the 30th September of each year.

17.   (1)            The Commission shall establish and maintain the following funds, that is -

(a)             an operating fund;

(b)             an education fund;

(c)             a security and insurance development fund; and

(d)             a general reserve fund.

(2)            The sums of money derived from the resources of the Commission under section 16 of this Decree shall be paid into the funds established in pursuance of subsection (1) of this section as follows, that is -

(a)             in the case of the operating fund, 50 per cent;

(b)             in the case of the education fund, 30 per cent;

(c)             in the case of the security and insurance development fund, 20 per cent;

(d)             in the case of the general reserve fund, the net operation surplus in the operating fund at the end of each year.

(a)             to the cost of administration of the Commission;

(b)            for reimbursing members of the Board or of any committees set up by the Board for such expenses as may be expressly authorised by the Board in accordance with the rates approved by the Minister;

(c)             to the payment of salaries, fees or other remuneration, allowances, pensions and gratuities payable to the employees of the Commission; and

(d)             for the maintenance of any property vested in the Commission.

(a)             the Chartered Insurance Institute of Nigeria;

(b)             the West African Insurance Institute;

(c)             such other insurance educational institutions as the Board may, from time to time, determine, to assist the institutions in the education of professionals required for the insurance industry.

21.   (1)            The general reserve fund which contains the net operational surplus in the operating fund at the end of every year shall be applied to such purposes and invested in such manner as the Board may, from time to time, determine.

(2)            The net operational surplus in the operating fund at the end of each year shall be determined after meeting all the current expenditure for that year and after making such provisions as the Board may deem fit for the depreciation and superannuation funds and all other contingencies.

22.   (1)            The Commission may, within and outside Nigeria, accept gifts of land, money or other property or things upon such terms and conditions, if any, as may be specified by the person or organisation making the gift.

(2)            The Commission shall not accept any gift if the conditions attached by the person or organisation making the gift to the acceptance thereof are inconsistent with the aims and objectives of the Commission under this Decree.

23.   (1)            The Commission shall cause to be prepared and submitted to the Board, not later than 3 months to the end of the year or soon thereafter, an estimate of the expenditure and income of the Commission during the next succeeding year.

(2)            The Board shall cause to be kept proper accounts and proper records in relation thereto and when certified by the Board, such accounts shall be audited by auditors appointed from the list and in accordance with the guidelines supplied by the Auditor-General of the Federation.

26.   (1)            In addition to any return which is required under section 25 of this Decree, the Commission may, with the approval of the Minister, by notice in writing, call upon any insurance institution to furnish to it within a time specified in the notice, such return or further returns as the Commission may require.

(2)            For the purpose of inquiring into or ascertaining the liability of an insurance institution under this Decree, the Commission may, by notice in writing, require the insurance institution to -

(a)             furnish it with such information as it may require; or

(b)             attend and give evidence before it or before an officer authorised by it for that purpose; or

(c)             produce any book of account, documents and other papers relating thereto in the custody or under the control of an insurance institution or any person under its supervision or control.

27.   (1)            The Commission shall at the beginning of each year assess and furnish to the insurance institution, the sum payable as contribution to the Commission for the year.

(2)            An assessment made pursuant to subsection (1) of this section may be confirmed, varied or modified by the Commission, upon being shown a balance sheet duly audited showing the financial position of the insurance institution for the close of the previous year.

28.   (1)            An insurance institution aggrieved by an assessment or a decision made by the Commission pursuant to section 27 of this Decree may appeal to the Minister within 28 days of his receiving the notification of assessment.

(2)            The decision of the Minister on an appeal under subsection (1) of this section shall be final and binding and shall not be the subject of any action or proceeding in any court or tribunal.

29.   (1)            Any sum payable under this Decree or any installment thereof unpaid, including any additional sum, may be sued for and recovered in a court by the Commission or by any officer authorised in that behalf by the Commission.

(2)            Where an insurance institution is liable to pay any sum of money or installment under this Decree and fails to pay the sum payable on or before the date on which the sum is due and payable, the insurance institution shall, in addition to the inability to pay the sum or installment, be liable to pay an additional sum at the rate of 2¹/₂ per centum above the Central Bank of Nigeria minimum discount rate.

(3)            The additional sum or installment payable under subsection (2) of this section shall be computed from the date on which the sum became due and payable.

(4)            Any sum or additional sum payable under this Decree shall be deemed to become due and payable as a debt due to the Commission and may be recovered pursuant to this section.

(5)            Failure by an insurance institution to pay any sum or additional sum due under this Decree shall constitute a ground for the cancellation of its certificate of registration under the Insurance Decree 1997.

(6)            For the purposes of implementation of the provisions of subsection (5) of this section the Commission may exercise its powers thereof without recourse to the provisions of subsection (1) of this section.

30.   (1)             Notwithstanding any other provisions of this Decree or any other enactment, an insurance institution which -

(a)             for the purpose of avoiding payment of any sum due under this Decree knowingly makes any false statement, declaration, representation, or produces, furnishes or causes to be produced or furnished any return document information which is false in any material particular; or

(b)             fails to pay to the Commission within such period as may be prescribed any sum due under this Decree; or

(c)             fails to make any returns, as the case may be,

(2)            The court before which an insurance institution is convicted of an offence under this Decree may, without prejudice to any civil remedy, order the insurance institution to pay to the Commission any sum together with any interest or penalty thereon certified to be due from the insurance institution to the Commission at the date of conviction and such amount may be recovered in the same manner as a fine and paid to the Commission.

31.   (1)           There is hereby established for the Commission an Inspectorate Department which shall be responsible for carrying out the supervisory functions of the Commission in respect of insurance institutions and shall for that purpose -

(a)             not less than once in every 2 years, authorize an inspection, examination or investigation of every insurance institution for the purpose of satisfying the Commission as to whether or not the provisions of this Decree or the Insurance Decree 1997 or any regulations made thereunder are being complied with;

(b)            may, without prejudice to the provisions of paragraph (a) of this subsection; at any time, authorize one or more inspectors or other officers, to inspect, examine or investigate any aspect of the insurance institution's business; and

(c)             with reference to the inspection to be carried out under paragraph (b) of this subsection, the Commission shall submit to the Minister a half yearly report on the activities of the Inspectorate Department.

(2)            The Inspectorate Department shall -

(a)             be headed by a Chief Inspector of Insurance whose status shall be of the rank of a Director;

(b)             have such number of other officers, to be known as inspectors as may be necessary and e