03 Jan



Made up largely of agents and brokers.

An agent has been defined as a person who acts on behalf of another. An agent can bind his principal by issuing cover notes, collecting premium and so on. Since agents stand in fiduciary relationship, they owe their principal a duty of utmost good faith and disclose all information received in the course of business to their principal-UNN V Turner.

Section 34 Insurance Act mandates that all insurance agents must be duly appointed by an insurer and licensed to that effect on under the Act (license renewable annually). No unlicensed person should transact as an insurance agent else 100k or 3 years or both. In addition, the court may order such person to refund such moneys collected to rightful owners.

Insurers are meant to keep a register of their agents and date of appointment. Where an insurer knowingly or recklessly transacts with an unregistered agent he is liable to pay 100k and the Agent must immediately remit premium collected else 10k, 50 and 100k (or 3years or both) for 1st second and third time respectively. In addition to cancellation of the licence and disqualification from being licensed again as an insurance agent-Section 35.

INSURANCE BROKERS: Section 36 mandates pre-registration under the CAMA and with NAICOM in accordance with this Act before one can transact as an insurance broker. Else, 250k or 2 years or both coupled with refund of the sums collected. An insurer who knowingly transacts with an unregistered broker shall pay a fine of 500k and other additional orders by the court-Section 36. Section 1 of the National Council of Registered Insurance Brokers Act establishes the Council of Registered Insurance Brokers which maintains a register of Insurance Brokers with all necessary details.

The NAICOM can cancel or suspend registration where the broker breaches relevant provisions, misrepresents to clients, is convicted for an offence involving fraud or dishonesty, and so on-Section 37. An insurer who transacts with a suspended broker shall pay a fine of 250k or risk cancellation of his registration if he contravenes again.

The insurance broker must remit premiums collected. All monies, premiums and claims should be paid into the Insurance Broker’s Trust Account else 250k or 3 years. Account of insurance brokers are to be audited by an external auditor.


  • Possible conflict of interest.
  • Argument between NAICOM and NCIB.



Quite eccentric really

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