NAICOM converts USD EUR GBP ISS levy to naira, ends incorrect conversion

• NAICOM has clarified that its 1% ISS Levy must be paid in the denominated foreign currency (US Dollars, Euros, and Pounds), not converted to Naira.
• The move is aimed at simplifying the payment process for insurance companies operating in Nigeria.
• Insurance companies with foreign currency-denominated assets will need to adjust their financial reporting and compliance with regulatory requirements.

NAICOM has directed these companies to adjust their financial reporting and compliance with regulatory requirements accordingly.

The National Insurance Commission (NAICOM) has announced a significant change to the way insurance premiums are calculated in Nigeria. The commission's 1% ISS Levy, which was previously being incorrectly converted to Naira by some underwriters, is now required to be paid in the denominated foreign currency (US Dollars, Euros, or Pounds) in which the insurance transaction was contracted. This move is aimed at simplifying the payment process for insurance companies operating in Nigeria.

NAICOM has directed these companies to adjust their financial reporting and compliance with regulatory requirements accordingly.

NAICOM's decision regarding the ISS Levy is a significant development in Nigeria's insurance regulatory landscape. The move is likely to have far-reaching implications for insurance companies operating in the country, particularly those that have been paying premiums in foreign currencies. As the regulatory body responsible for overseeing the insurance industry in Nigeria, NAICOM has the authority to make such changes under the Nigerian Insurance Industry Reform Act (NIIRA) 2025.

The clarification on the ISS Levy payment currency is also a response to the challenges posed by fluctuations in exchange rates and the need to simplify the payment process for insurance companies. This move demonstrates NAICOM's commitment to ensuring that the insurance industry operates in a fair and transparent manner.

The clarification on the ISS Levy payment currency is a critical development for insurance companies operating in Nigeria, particularly those with foreign currency-denominated assets. The move will require these companies to adjust their financial reporting and compliance with NAICOM regulations, which may involve significant costs and administrative burdens.

Lawyers should be aware of the implications of this clarification on insurance companies' financial reporting and compliance with NAICOM regulations. The change may also have broader implications for the Nigerian economy, particularly in terms of exchange rate management and foreign investment.

Lawyers should watch for the implications of this conversion on insurance companies' financial reporting and compliance with NAICOM regulations, particularly regarding foreign currency-denominated levies.

Source: Original reporting via NAICOM