Nigeria’s Central Bank warns Banks against offering of products with Insurance features

DON’T OFFER PRODUCTS WITH INSURANCE FEATURES- CBN WARNS BANKS

insurance-umbrella

The Central Bank of Nigeria (CBN) has advised banks in Nigeria to desist from offering products to their customers that incorporate insurance features.

The CBN also warned banks not to offer free premium payments as a feature of any of their products.

Nigerian banks are enjoined to adhere strictly to its ‘’Revised guidelines on bancassurance model’’ as published on their website

The banks are also enjoined to periodically undertake a due diligence assessment of their partner insurance companies, which must be licensed by the National Insurance Commission.

The banks are also not to undertake any form of insurance underwriting, claim settlement or marketing outside its laid down guidelines.

The CBN’s action is imperative as only licensed insurance companies have the necessary structure to underwrite and manage risks using various models in line with their core competencies.

Bank customers who require insurance products for their collaterized assets, bonds or other guarantees are advised to seek advice and guidance from their appointed insurance brokers in order to avoid disputes in the event of a claim, which could disrupt their businesses.

Bank customers also need to be aware that they have a right to retain the services of their appointed insurance brokers for necessary advice as against being coerced by banks to patronize their nominated subsidiaries.

 

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