The Broker's Three Requests

Request 1 - Backdating cover.

• The policy would state an inception date before the risk was actually accepted and before premium was received. The 3 June accident would be presented as falling within cover when it did not.
• This is a misrepresentation of the contract and, if done knowingly, a fraud on the insurer (and potentially on the client, who may later be exposed). The policy is voidable and the insurer may repudiate the claim.
• It breaches the underwriter's duty of good faith and the professional obligation not to facilitate dishonesty. It is also likely to breach NAICOM's market-conduct rules on accurate records.

Request 2 - Commission sharing.

• Sharing brokerage with the client's employee is rebating. It is prohibited by the Insurance Act and by NAICOM's code of conduct for insurance intermediaries, and it is a secret profit for the fleet manager.
• It corrupts the client's decision-making and may amount to a bribe under Nigerian anti-corruption law. The broker risks licence withdrawal; the underwriter who facilitates or knows of it risks disciplinary action.

Request 3 - Omitting two vehicles.

• This is a deliberate misrepresentation of the risk. It understates exposure, under-prices the account and misleads the insurer's reinsurer if the risk is ceded.
• The promise to 'add them later if there is a claim' is an intention to defraud the insurer at claims stage. If a vehicle not on the schedule is involved in a loss, the claim will be resisted and the insured may be left uninsured.

Common theme: all three requests convert an ordinary commercial negotiation into dishonesty. 'Everyone does this' is not a defence.

Immediate response:

• Decline all three requests clearly and in writing, without being drawn into a negotiation about them. A simple line works: 'I cannot backdate cover, share commission with your client or omit vehicles from the schedule; I can, however, discuss a realistic inception date, a competitive rate and a payment plan.'
• Offer legitimate alternatives: a 13 June inception with a separate short-period cover for the gap if the client needs it (subject to underwriting and no known loss); a rate review or instalment arrangement; and a full schedule with no omissions.

Escalation:

• Report the requests to her compliance officer or line manager in writing, using the whistleblowing or market-conduct route. If the branch manager is part of the pressure, escalate above her.
• Record the requests, her refusal and the escalation in the file note, with dates and names.
• Do not discuss the matter informally with the broker outside the record.

If pressured to proceed:

• Refuse; the underwriter's personal accountability is not extinguished by a manager's instruction.
• Put the refusal in writing to the manager and copy compliance.
• Consider whether the insurer should decline the account altogether if the broker's conduct is repeated.

Tone: professional, not accusatory at first. The broker may be testing; a firm, documented refusal often ends the matter. If it does not, the compliance route must be used.

For the insurer:

• The claim is likely to be investigated and repudiated for misrepresentation and non-disclosure; the policy may be avoided.
• If the matter becomes public, the insurer faces regulatory sanction from NAICOM, reputational damage and possible loss of reinsurance recoveries if the risk was ceded on a false basis.
• The insurer may face a third-party claim from the injured party if motor liability is involved, and may have to satisfy a judgment even though it can recover from its insured.

For Tolu (underwriter):

• Personal disciplinary liability before her professional body; possible dismissal for gross misconduct; potential criminal liability for fraud or conspiracy.
• The 'manager told me to' defence is weak: professional duties are personal.

For Kunle (broker):

• Licence withdrawal or suspension by NAICOM; disciplinary action by his professional body; loss of the account and of future business.
• Potential criminal liability for the commission payment and for the false schedule.

For the fleet manager and the client:

• The fleet manager has taken a secret profit; the client may dismiss him and recover the money.
• The client may find that the two omitted vehicles were never insured, and that the backdated inception does not help because the misrepresentation voids the cover.

Systemic lesson: the file will be the evidence. Underwriters should assume every email, schedule and endorsement will be read by a regulator, a reinsurer or a court.