No premium, no cover: running premium collection and remittance cleanly
In Nigeria, cover should not start before premium is paid. What that means for how a broker issues debit notes, collects and remits.
NAICOM's "No Premium, No Cover" rule means an insurer should not put cover in force until the premium has been paid. For a broker who collects premium on the insurer's behalf, that turns collection and remittance from back-office tidying into something that decides whether the client is actually insured.
Issue the debit note the moment the client accepts
A debit note for every policy and every endorsement, with the premium, the period and the policy number (or "to be advised"). A return premium on an endorsement is a credit note to the client.
Record money in and money out separately
- Received from the client: against the debit note, with the date and teller or transfer reference.
- Remitted to the insurer: against the same debit note, so you can always see what you hold and what you have passed on.
Don't call a policy active until both things are true
Premium has been received, and the insurer has confirmed the policy number. Until then the client is not covered, and your records should say so. That's exactly how the workspace treats it: a policy moves to Active only when both are recorded.
Action plan
Tighten collection
- 01
Debit note on acceptance
Same day, every time.
- 02
Chase the outstanding list weekly
Debit notes not fully paid, oldest first.
- 03
Remit promptly
Record each remittance against its debit note.
