Enforce insurance laws

The Senate has asked its Committee on Banking, Insurance and other Financial Institutions to deliberate on ways of ensuring strict implementation and compliance with the compulsory insurance schemes as provided for by the Insurance Act Regulation 2003 and invoking sanctions where necessary. The Act expressly provides for six compulsory insurances namely Third Party Motor/Vehicle Insurance, […]

The Senate has asked its Committee on Banking, Insurance and other Financial Institutions to deliberate on ways of ensuring strict implementation and compliance with the compulsory insurance schemes as provided for by the Insurance Act Regulation 2003 and invoking sanctions where necessary. The Act expressly provides for six compulsory insurances namely Third Party Motor/Vehicle Insurance, Building Under-Construction Insurance, Group Life Insurance, Public Buildings Insurance, Workman Compensation Insurance and Professional Indemnity Insurance.
These insurance schemes were made mandatory to take care of third party liabilities arising from the actions or inactions of a person, group or organization in the course of their legal activities. Lawmakers said they were alarmed by the staggering number of Nigerians who seek help from private individuals, good Samaritans, friends, family or philanthropists for various reasons including mishaps at work, illness traceable to occupational hazards, debilitating injuries and death resulting from motor accidents or collapsed buildings despite the provisions of the Insurance Regulation Act. All of such misfortunes should be covered by insurance pay outs if compulsory insurance schemes are implemented as provided for in the Act.
This country is grossly under-insured because most citizens do not take advantage of services rendered by insurance companies as a result of apathy, ignorance, fear and mistrust of the whole concept of insurance. There are those who believe that misfortunes are “the will of God” and insurance is therefore unnecessary. However, the biggest problem is the poor public perception of insurance companies which have a reputation for prompt collection of premiums but interminable delays when it comes to paying out on claims.
With the increasing number of building collapses nationwide it is imperative that any structure rising above two floors must paste a copy of their Building Under-Construction Insurance on site. The same pasting of insurance cover should be made compulsory at factories where injured workers are often left to suffer without compensation. Nigerians are also discouraged by the large number of fake insurance institutions selling worthless insurance certificates to unsuspecting members of the public.
There are 58 insurance companies registered with the National Insurance Commission. Sections 3(a) and (b) as well as Section 4(1 – 4) of the Insurance Act expressly provide the conditions for the registration of insurance companies in Nigeria, but the provisions are frequently flouted. This mostly manifests in the third party motor vehicle insurance, where an estimated 12 million Nigerian motorists use fake insurance papers. Many Nigerians are unaware that if they damage another vehicle, injure a passenger in their vehicle or a pedestrian walking nearby, or damage public or private property, their third party insurance is supposed to pay out a claim. Most accidents instead result in exchange of blows or one party being forced to repair the damage or compensate the victim.
As a result of this reluctance to claim on third party insurance, the cover note has become simply one of the “particulars” that the police demand at their numerous check points despite the fact that they have no means of knowing whether the document is fake or not! In recognition of this, vehicle licensing agencies connive with such unregistered institutions to collect premiums and issue worthless cover notes. Most vehicle owners pay for insurance in the licensing office when they renew their vehicle license. This is the origin of most fake insurance papers as the public believe that if they pay at a government office then it must be genuine.
Insurance is a huge business with enormous growth potential in terms of employment and solving social and economic problems. If the compulsory insurance schemes are implemented as provided for in the Insurance Act most of the challenges faced by Nigerians when they encounter misfortunes will be solved. Regulatory authorities must annually check major employers and construction companies to ensure they are up to date with their insurance cover, while the Economic and Financial Crimes Commission (EFCC) must be up and doing in uncovering the perpetrators of this multi-million fake insurance scam.