NAICOM-approved rates and checking a policy is valid
Who approves premium and commission rates in Nigerian insurance, how a broker or client can confirm a cover is valid, and how to check commission received.
By Achekam · · 4 min read · For Insurance businesses in Nigeria
A client in Lagos calls the brokerage: their fleet insurer has quoted a premium far below everyone else's, and a friend says the policy might not even be real. A week later, the brokerage's own accountant asks why the commission from one insurer looks lower than the rate the team assumed. Both questions lead to the same place: the National Insurance Commission, and what it approves.
This piece explains NAICOM's role in setting premium and commission rates, how anyone can confirm that a cover is genuine and active, and how a Nigerian broker can check the commission it receives and reconcile the account it lands in.
NAICOM approves the rates
NAICOM lists among its mandate the approval of the rates of insurance premiums and the rates of commissions to be paid for all classes of insurance business in Nigeria, and the approval of standards, conditions and warranties applicable to all insurance business.
That has two consequences for a broker. Premiums are not simply whatever an insurer chooses to charge, and commission is not a private bargain between the broker and the insurer: both are tied to rates NAICOM approves. A quote that looks far out of line with the market deserves a question before it reaches a client, and a commission that differs from the approved rate deserves one before it reaches the books.
NAICOM describes itself as the apex regulatory authority for Nigeria's insurance sector, overseeing insurers, reinsurers, takaful and microinsurance companies, insurance brokers, loss adjusters, web aggregators and agents. It also says the Nigerian Insurance Industry Reform Act (NIIRA) 2025 consolidates and repeals several earlier insurance laws, including the Insurance Act 2003. Rates, conditions and the firms that sell insurance therefore all sit under one regulator and, now, one consolidated Act.
Standards, conditions and warranties
The same mandate covers the standards, conditions and warranties applicable to all insurance business. For the client, the warranties in a policy are often what decide a claim: an alarm that must be kept working, a vehicle that must be driven only by named drivers, stock that must be stored off the floor.
A broker adds real value by explaining these before the policy is accepted, not after a claim is refused. When comparing quotes from different insurers, put the conditions and warranties side by side, not only the premium.
The cover verification tool
NAICOM offers a verification tool for confirming that an insurance cover is valid, active and recognised by the Commission. That answers the client's question directly: anyone can check that a policy exists and is in force, rather than relying on a certificate that could have been printed anywhere.
Use it routinely, not only when something feels wrong:
- for every new policy, before the documents go to the client;
- at renewal, once the renewed cover is issued;
- whenever a client presents a policy placed elsewhere and asks you to take it over.
What a broker should check before handing over a policy
A short pre-delivery checklist:
- The insurer appears on NAICOM's lists of licensed insurers.
- The cover shows as valid and active on NAICOM's verification tool.
- The premium is in line with the rates the insurer is entitled to charge for that class.
- The conditions and warranties have been explained to the client, and the client has acknowledged them.
- The commission due to the brokerage has been noted, at the expected rate, so it can be checked when it arrives.
Keep the result of the verification with the policy file. If a dispute arises later, a dated record that the cover was checked is useful evidence of your own diligence.
Matching commission received to the approved rate
When the insurer pays, compare the commission on its statement with what you expected. A difference may have an innocent explanation, such as a mid-term change, a refund of premium or a different class, or it may be an error. Either way, find out before the month closes. A brokerage that posts commission by insurer can see the pattern quickly; commission income by insurer explains how to set the accounts up.
Where the brokerage invoices insurers for commission, Achekam records customer payments against one invoice or spread across a customer's invoices. A part payment leaves the invoice part-paid, and any extra is held on the customer's account. A short commission payment therefore shows up as a part-paid invoice, which is the prompt to query it.
Reconciling the account where commission lands
Commission arrives in the bank, so the bank reconciliation is where a missing or short payment finally shows. In Achekam a business imports bank statements as PDF, CSV, Excel, OFX, QIF, MT940 or CAMT.053, and each import is checked so that the opening balance plus movements equals the closing balance. Bank lines are matched by suggestion and a person accepts each match; a line not yet in the books becomes a suggested journal a person approves; and a reconciliation completes only when every leftover line is explained or nothing is left over.
The routine for matching insurers' payments to statements is in commission from insurers into the bank.
NAICOM's website is the regulator's home page, with lists of licensed insurers, brokers, loss adjusters and agents, its regulatory guidance and the cover verification tool.
Add the verification check and the commission note to your policy-delivery routine this week. Both take minutes, and both answer questions clients and accountants will otherwise ask you later.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
