•Operators dissociate selves from allegation of sabotage, pledge support


By Henry Uche, [email protected]

The Nigerian Insurers Association (NIA) has berated insurance companies sabotaging the implementation of the reviewed third party insurance policy, saying such underwriters would not go unpunished. 

The Director-General of NIA, Mrs. Yetunde Ilori, stated this in a circular, titled, NIA.MTPC/YI/23, ‘Adherence To The Approved Rates For motor Insurance’, dated; May 24, 2023 and sent to all Chief Executive Officer of Member, General Business.

National Insurance Commission (NAICOM) had in  a circular marked: NAICOM/DPR/CIR/46/2022, dated 22nd December 2022, reviewed upward the third party  motor insurance policy from N5000 to N15,000, while claims for motorists was raised to N3million in the event of an accident.

In the circular, NAICOM gave insurance companies ten (10) days to start implementation, however the new rate didn’t go well with some stakeholders including vehicle owners, Insurance Consumers Association of Nigeria (INSCAN), some industry watchers, among others.

Despite criticisms over the matter, NAICOM stood on its ground and defended its decision, saying the Commission was empowered to approve the new rates for motor insurance premiums by virtue of Section 7 of the NAICOM Act 1997 and other extant laws and warned that failure to comply with the directive would attract appropriate regulatory sanction.

NAICOM through its Head of Corporate Communications of NAICOM, Mr. Rasaaq Salami, stressed that inflation (time value of money) led to the upward review. Besides, there would be an improved benefits to policyholders for Third Party Property Damage (TPPD) limit from N1m to N3m and in the case of death, benefit is unlimited and extension of cover on vehicle travelling across the West Africa states.

On timing, Salami said the old rate came into effect in 2004 (19 years ago) and as a result – the value of N5,000 as at then is not the same again in the prevailing economic realities and same with the N1m TPPD limit.

He added that it was imperative for the insured to understand that the insurance cover is for their protection. “It’s unlike the other vehicle documents which are mainly to identify ownerships, rights and worthiness of the vehicle to be on the roads. Perhaps, this situation will awaken the motorists to the reality that the third-party motor liability insurance certificate is not a worthless document but that which is of great value.

“The motorists should begin to take interest in it, take out time to procure their insurances directly from any insurance company of their choice or through a registered insurance broker. By doing so, they will be able to put a face to the names and in the event of any accident, they know exactly who to contact to process their benefits,” he maintained.

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Five months down the line, the insurers’ Umbrella- the NIA, lamented that some insurance companies are selling third party motor insurance policy below approved rates of N15,000 and threatened to report defaulters to the regulator – NAICOM.

Mrs. Ilori noted that with the decision reached at the 2023 CEOs retreat in respect of the need to implement the new premium rates on motor insurance, it has become imperative for the association to reiterate the need for companies to sell motor insurance policies at the approved rates.

She affirmed that secretariat received reports that some companies were selling below the approved rates, stressing that this does not augur well for growth of the market as such defiance would cause serious reputational damage to the industry.

She added the Governing Council was displeased with the activities of agents within licensing offices engaged by member companies to sell third party motor insurance at reduced rates and other such arrangements.

“NIA would not hesitate to report defaulting companies to NAICOM, such insurers should stop forthwith and comply with new rate to avoid regulatory sanction” she censured.

Reacting, the Deputy General Manager /Head, Corporate Communications & Investor Relations, of Sovereign Trust Insurance, Olusegun Bankole, who exonerated Sovereign Trust confirmed the ugly narrative and threw its weight behind the call for sanctions against erring insurance companies.

“That’s the truth. Some insurance companies are still circumventing the process and it is such a very sad development at a point when the Commission is trying to help the Industry grow its revenue through one of the most profitable policies in the product bouquet of many insurance companies.

“For us, we are strictly very professional organization. So I support the motion that any erring company should be sanctioned appropriately when proven that they are bending the rules. They should take a cue from the Banking Industry, their lending rates are sacrosanct and you dare not cut corners” he empathised.

Similarly, the Communications Manager of AIICO Insurance – American International, Ademola Adenekan​, who equally exculpated AIICO maintained that the insurer does not sell below the approved rates. “I tell you for a fact that we don’t sell below the approved rates, and we would rather not comment on it” he assured.

Sanlam Insurance (former FBN Insurance) and Heirs Insurance equally disassociated themselves from such audacious disobedience to NAICOM directive. For Heirs, they maintain, “We had complied with NIACOM’s directive from the start date”.

On their part, the Executive Director, finance and administration, Guinea Insurance, Mr. Pius Edobor, who frowned over sad development averred that Guinea Insurance has never been part of such unwarranted act and would never be, therefore raised its hands in support of sanctions to be meted against defaulting insurers. “It is uncalled- for, we’re not part of such unprofessional act, we are hundred percent in support of sanctions against defaulting insurers”.