Guidelines for Insurers

Section 43 of Insurance Act, 2006 requires every insurer to submit its business plan to the Commission for approval. These guidelines are to provide guidance on the contents of business plans of Life companies, Non-Life companies and Re-insurers. 

The guidelines shall be relevant for the following situations

Companies desirous of applying to the NIC for a new licence to carry on insurance business

Companies applying to the NIC for re-licensing under the Insurance Act, 2006, (Act 724)

Companies specifically directed by the NIC to submit a business plan

Any business plan required to be submitted to the NIC shall contain information on the following; 

 Describe the company’s business strategy, including marketing, underwriting, reinsurance, investment and risk management strategies

 Include financial projections for at least three years with appropriate scenarios, including optimistic and pessimistic scenarios.

 State the assumptions which underlie the projections, the reasons for adopting those assumptions and the accounting policies on which the projections are based.

Provide detailed information on the company’s board of directors organisational structure, management personnel and internal controls.

Provide information on all existing, proposed and intended third party agreements.

The business plan must be accompanied by a report of the company’s auditors on the adequacy of the company’s business plan and whether it has been properly prepared on the basis of the assumptions stated.

In the case of Life companies, the business plan must be accompanied also by a report of the company’s actuary, appointed for the purpose of section 56 of the Act, on the adequacy of the company’s policy of reserving and investments.

The business plan shall be signed by three directors of the company including the Chief Executive and the Board Chairman.

 Click here to download the entire Business Plan Guidelines for Insurers

 Guidelines for Brokers And Loss Adjusters

Section 114 of Insurance Act, 2006 requires every insurance intermediary to submit its application for licence to the NIC accompanied with the prescribed documentation. These guidelines are to provide guidance on the contents of business plans required (as prescribed documentation) to be submitted with applications for intermediary’s licence. 

The guidelines shall be relevant for the following situations

Companies desirous of applying to the NIC for a new licence to carry on insurance broking/loss adjusting business.

Companies applying to the NIC for re-licensing under the Insurance Act, 2006, (Act 724).

Companies specifically directed by the NIC to submit a business plan.

 

Any business plan required to be submitted to the NIC shall contain information on the following;

Describe the company’s business strategy, including marketing, and risk management strategies

Include financial projections for at least three years

State the assumptions which underlie the projections, the reasons for adopting those assumptions and the accounting policies on which the projections are based

Provide detailed information on the company’s board of directors organisational structure, management personnel and internal controls

Provide information on all existing, proposed and intended third party agreements

The business plan shall be signed by three directors of the company including the Chief Executive and the Board Chairman

 Click here to download the entire Business Plan Guidelines for Brokers And Loss Adjusters