The National Insurance Commission (NAICOM) has released new guidelines to address underwriting challenges. The areas covered are distribution, insurance product innovation, policy and claims servicing.

Other areas covered by Insurance Regulatory Sandbox Regulatory Guidelines, are market conduct guidelines for Takaful, Retakaful insurance operators, enterprise risk management framework for Takaful.

According to a circular released at the weekend by the Head of Corporate Communication and Market Development, Rasaaq Salami, the new guidelines will ensure that operators act professionally and conduct business operations in line with best practices.

Providing more insights into the Insurance Regulatory Sandbox Operational Guidelines, Salami said it established a relaxed regulatory environment for the testing of innovative products, services, business models, channels of distribution subject to regulatory discretions, and set parameters that have the potential of improving insurance inclusiveness and service efficiency.

“The possible areas of innovation that will be allowed into the Regulatory Sandbox are as follows: insurance solicitation or distribution, insurance products, underwriting, policy and claims servicing and any other activity within the insurance value chain,” he submitted.

The commission stated that the new guidelines are issued in exercise of the powers conferred on the Commission under the NAICOM Act 1997 and the Insurance Act 2003, adding that the guidelines would read in conjunction with the provisions of the Insurance Act as well as other regulations, notices and circulars that the commission may issue from time to time.

NAICOM noted that an applicant would be eligible to be considered for the sandbox after meeting set criteria, which include the ability to demonstrate the potential to advance inclusive insurance.

“Where the innovation involves the introduction of an insurance product or underwriting process, the applicant shall partner with an insurer. “Fin/Insur technology firms shall be registered under the CAC Act,” NAICOM added.