Understanding the new framework for insurance web aggregators

Rebecca Ebokpo and Frances Obiago


In pursuance of the powers conferred on the National Insurance Commission (the “Commission”) by the National Insurance Commission Act 1997 (the “NAICOM Act”), the Commission recently issued the Insurance Web Aggregators Operational Guidelines (the “Guidelines”). 

The Guidelines are set to be the compass for supervising and monitoring web aggregators as insurance intermediaries who provide information on the products offerings of various insurers and are to be read conjunctively with other Circulars, Guidelines and Regulations that may be issued by the Commission.


Who is a Web Aggregator?

The Guidelines define a web aggregator as a company registered under the Companies and Allied Matters Act (CAMA) and approved by the Commission, which maintains or owns a website and avails information pertaining to insurance products, price and features comparison of products of different insures and offer leads to an insurer.


Licensing Requirements

By the Guidelines, any insurer who intends to carry on the business of a web aggregator is required to obtain a grant of no objection from the Commission while an applicant other than an insurer is required to obtain a licence as a web aggregator from the Commission before carrying on the business of web aggregators. Both the grant of a “no objection” approval and the licence are given upon the satisfaction of the requirements stipulated in the Guidelines. 

The Guidelines make it mandatory for the web aggregator to enter into a Service Level Agreement (SLA) with an insurer or broker, and makes the inclusion of certain terms in the SLA mandatory. Such terms include the duties of the parties, data elements to be shared, duration of the SLA, commission and fees to be charged.  

To be eligible for the grant of a licence as a web aggregator, the Guidelines provide, among other things, that the applicant must be incorporated under CAMA with the business of web aggregation as its only and main object with a minimum share capital of N5,000,000 (Five Million Naira). In bringing its application, the applicant is required to complete an application form and pay the requisite fees as specified in the Guidelines.


Fees and Validity

The fees payable for registration as a web aggregator are as follows:

  1. N500, 000(Five Hundred Thousand Naira) non-refundable application fee;
  2. N2,500,000 Two Million, Five Hundred Thousand Naira) licencing fee; and
  3. N1,000,000(One Million Naira) renewal fee. 

The levy payable by the web aggregator has been pegged at 1% of the gross commission or a minimum of N200,000 (Two Hundred Thousand Naira), whichever is higher, while the commission payable to the web aggregator shall not exceed 30 % of the Brokers commission as stated in Section 53 of the Insurance Act, 2003. It is also provided that the “no premium, no cover” rule of section 50(1) of the Insurance Act, is the guiding principle for payment of premiums under web aggregation operations which implies that a receipt of an insurance premium is a condition precedent to a valid contract of insurance.

By the Guidelines, the validity period of a licence shall be for a period of two calendar years and a renewal application shall be submitted at least 45 days prior to the expiration of the licence. It is also provided that a license issued to a web aggregator that is not submitted for renewal after the expiration of the (30) days of grace, is deemed as lapsed and re-registration may only be considered after a three (3) years cool-off period.


Operating Requirements

During its operations, a web aggregator is required to always possess and maintain a professional indemnity insurance cover with a minimum limit of N20, 000, 000 (Twenty Million Naira) or 50% of its annual gross commission income whichever is higher.

The Guidelines also make elaborate provisions on the code of conduct of web aggregators, touching on their relationship with clients, handling of complaints and matters relating to advertising. The Guidelines further provide for the business obligations of web aggregators and insurers and outlines specifications on web aggregators’ site specimens and display of products comparisons on the website.

Accordingly, the Guidelines puts certain restrictions on the activities of web aggregators, some of which include: the display of any information pertaining to products and services of other financial or other product or service on the website, display of advertising of any sort, operation of multiple websites or a tie-up with other approved/unapproved/unlicenced entities/websites for lead generation, operation of the website(s) of other financial or sale entity or use of other social media sites for comparison of products etc.

The Guidelines also lays down information technology infrastructural requirements for operations of a web aggregator which include standards for computer networks and internet; provisions on backup, recovery and business continuity, IT security policy and privacy, standards of identification, access control and security log.

The Guidelines also make provisions touching on employees of web aggregators some of which include the requirement for the approval of the Commission for the appointment of a Principal Officer, the requirement that employees of web aggregators must fulfil conditions of being fit and proper persons as adjudged by the Commission as well as complete required hours of practical training in insurance and web aggregation in the Commission’s accredited training institution, etc. 

The Guidelines further require that in respect of disputes between a web aggregator and partner insurer, the provisions of the SLA in respect to arbitration must be exhausted before referring the matter to the Commission. In respect of disputes arising out of insurance transactions, an affected individual is entitled to refer the matter to the Commission. The Guidelines also puts a duty on the web aggregator and the partner insurer to put in place an appropriate complaints redress mechanism to ensure that client’s issues are properly addressed.

In respect of financial reporting and disclosures, the Guidelines make it mandatory for the web aggregator to prepare Annual Reports and submit same to the Commission in respect of each accounting year and the same must be in accordance with the International Financial Reporting Standard. It also puts a duty on the web aggregator to make certain material disclosures to the Commission relating to particulars of the officers of the company and the company as well as any change thereof.


Effective Date

The Guidelines became effective on 1st February 2022 and prohibit any person from functioning as a web aggregator without being licensed by the Commission. Nevertheless, a grace period of 60 days from the effective date of the Guideline was provided to enable any unlicensed web aggregator to obtain the licence to operate, failing which the sanctions may be imposed by the Commission as specified under the NAICOM Act and the Insurance Act 2003. 



The hitherto largely unregulated business of insurance web aggregators has now become fully regulated by the Guidelines. Consequently, the obligations, duties and responsibilities of actors and stakeholders within this spectrum are now clearly spelt out and defined. This represents one of the much-needed regulations in insurance business operations in the light of technological evolution in insurance service delivery.


Leave A Reply

Your email address will not be published.