Chuks Udo Okonta
The National Insurance Commission (NAICOM) is contending
with the challenge of ‘Yes premium No Cover’ a situation where operators collect
premium and renege on claims settlement.
The commission in a statement released recently,
said it facilitated payment of claims worth N2.2 billion last year and resolved
61 disputes, this is an indication that NAICOM needs to do more in ensuring
that the public get cover for their premium. It also revealed that some operators
are yet to come to terms with the principle of indemnity which is highly
esteemed in insurance principles.
Inspen gathered that NAICOM in
a bid to tackle this menace will soon come out with rules to sanction insurance
companies that default on claims settlement.
A source at the commission
said before the end of second quarter of this year, a stricter rule on claims
default will be issued and offenders will be severely punished for any
infraction.
It was learnt that the
commission took the step because of the compliance that have greeted the no
premium no cover policy which has enriched insurers lately.
Commissioner for Insurance Fola Daniel, said the
commission is working assiduously to stem the menace of claims default, adding
that claims settlement remains the best advertorial for the industry.
He had at different occasions called on
operators to allow the
benefits obtained from the new policy collection and remittance regime impart their
claims settlement, staff remuneration and better returns on investment for
shareholders.
He noted that as part of the commission’s continuing efforts at
protecting the interest of policyholders, it indeed strengthened its Complaints
Bureau Unit, stressing that the human and material capacity of the unit has
been substantially enhanced to meet with the challenges of dealing with
complaints emanating from the public against the industry promptly and
professionally.
He said: “To put a stop to
the vexed issue of delayed or non-payment of insurance premium by the insured,
the Commission commenced the implementation of section 50 (1) of the Insurance
Act 2003 on January 1st 2013. This law stipulates that “the receipt of an
insurance premium shall be a condition precedent to a valid contract of
insurance and there shall be no cover in respect of an insurance risk unless
the premium is paid in advance”. Invariably, it presupposes that no insurance
cover shall be granted by any insurance company without having received the
premium.
“The on-going implementation
of this law has significantly improved the cash flow of insurance institutions
in the country. It is expected that this positive turn of events would impact
on the capacity of operators to settle claims promptly, thus removing a major
sore point in the relationship of insurance consumers and service providers.
“The insurance sector is
currently embarking on several reforms which include transition to IFRS, Risk
Based Supervision, Market Conduct, Claims Settlement Reform; Financial
Inclusion, all geared towards developing the Nigerian Insurance industry and
improving the general perception of insurance. The industry is indeed in motion.”
Underwriters in a bid to meet
their claims obligations and forestall sanctions, are trying to assemble a pool
of independent investigators to investigate the genuineness of claims above
N500 million.
Director General Nigerian
Insurers Association (NIA) Sunday Thomas, said the association is working hard
to ensure that the pool is made up of experienced people, adding that the task
is beyond the capacity of few individuals.
“The first point of call is to have a pool of
investigators that would carry out that assignment on behalf of the
association. That is the stage that we are. We are trying to have a pool of
investigators that would handle the task, for the assignment is beyond what a
person can handle,” he said.
He said the decision to
institute the investigative pool was reached at the Association’s Chief
Executive Officers (CEOs), stressing that the initiative would help operators
learn from mistakes made in underwriting and claims handling.
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