Chuks Udo Okonta
Ministries, Departments and Agencies (MDAs) and other stakeholders that failed to embrace the No Premium No Cover provisions, would henceforth be sanctioned accordingly, the Federal Government has warned.
The Minister of State for Finance Dr Yeri Lawal Ngama, disclosed this in a circular entitled Guidelines on Insurance Premium Collection and Remittances - Compliance with Section 50(1) of the Insurance Act, issued to MDAs and other stakeholders.
He noted that in furtherance of the ministry's resolve to end the menace and era of non-remittance of insurance collections and premiums, as well as consolidate the gains of the on-going efforts in sanitising the insurance industry, the National Insurance Commission (NAICOM) has issued guidelines on insurance collection and remittance compliance in accordance with the provision of Section 50(1) of the Insuarnce Act 2003.
He said: "Arising from the observed non-compliance by MDAs and other critical stakeholders in the insurance industry, the ability of insurance companies to meet their various claims obligations under contracts of insurance to eligible beneficiaries has been grossly underminded. It is on record that the total premium debts owed the insurance companies by MDAs as at January, 2012 is N24 billion in spite yearly budgetary provision for insurance.
"Consequently, MDAs and other stakeholders are by this circular directed and adviced to comply with the provision of the above Act, as any MDAs/organisation found culpable, would be sanctioned accordingly. To this end, all MDAs and other stakeholders are enjoined to render their returns on premium collection and remittances to NAICOM as enshrined in the guidelines.
"In addition, it is worthwhile to note that henceforth, any contract of insurance entered into without payment of full premium in advance, shall be legally unenforceable.
"It is expected that the enforcement of this provision of the law, will strengthen insurance companies' ability to meet claims obligations under contracts of insurance."
He urged heads of MDAs to ensure that the information is brought to the attention of all concerned for strict compliance.
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