By Patience Saghana
Fake and deceptive insurance policies such as third party motor insurance, marine and fake medical insurance policies are spreading like wildfire across the country, and victims of these insurance frauds have paid tens of thousands of naira in obtaining fake policies.
Insurance industry premium income grew from N555.94 billion in 2003 to over N164 billion in 2008. The sector would have been close to N200 billion premium income but for the menace of fake operators surrounding the industry, insurance companies make do with the little business they could get.
The fake operators are not ready to close shops any time soon as insurance consumers are almost at a loss about how to recognise these fraudulent policies which constitute a potential huge revenue base for the insurance market.
But since its promulgation, insurance companies have not been able to capture 10 per cent of the market due to fake operators.
Mr. Fola Daniel, Commissioner for Insurance has said the commission was poised to eradicate the use of fake insurance certificates in the country.
Daniel said that fake certificates were prevalent in motor and maritime policies.â€œThe industryâ€™s experience on fake insurance certificates is in motor and marine and these two are among those areas that require compulsory insurance under the Insurance Act 2003.
â€œWe are planning to codify the certificates and deploy Information Technology (IT) facilities to eradicate the development 100 per cent,â€ Daniel said.
According to him, in the interim, the checking of these forged certificates was done manually, but had discovered that it was not particularly effective.
He said that when the exercise fully comes on stream, motorists found in possession of such documents would be asked to abandon their vehicles and go get a genuine policy from the nearest firm. Daniel said the genuine motor insurance policy remained N5,000, noting that those of N1,500 or N2,000 mostly in circulation, were being paraded by the fake representatives.
He said it had been discovered that some of these unscrupulous elements were even selling certificates of insurance firms that had ceased to exist since the completion of the industryâ€™s consolidation and re-capitalisation exercise in 2007.
Daniel stated that once NAICOM deploys its IT, all insurance practitioners would be expected to have their â€˜Online Real-Time Connections,â€™ hooked to it and every policy certificate would have a unique identity from the regulator.
It would be recalled that 17 fake insurance brokers were arrested in Abuja in 2008 by a combined team of stakeholders comprising representatives from consumer protection, Servicom, National Association of Road Transport Owners (NARTO), corporation of insurance brokers, Ministry of Justice and Legal Aid Corps were at the VIO headquarters at Mabushi to witness the arrest.
Leader of the police ACCOS team, SP Hussaini Dodo, told LEADERSHIP that the aim of the arrest was to stop fake issuance of insurance papers to motorists.
Dodo stated that the capital patrol ACCOS Team arrested agents and those purchasing the fake insurance certificates for investigation, adding that whoever was found to be involved would face the law. He stressed that this was the first time they were raiding them at the VIO premises.
According to him, some ACCOS Team officers have been deployed to Jabi and Gwagwalada to also enforce the law. Mr Gus Wiggle, Managing Director, Linkage Assurance bemoaned the scourge of fake insurance, declaring that it constitutes one key loss item in insurance industry.
He spoke to an audience of shippers and maritime regulators last week in Lagos. In his paper, Wiggle looked at the expectations of N12trn premium income for insurance in Vision 2020 and submitted that it requires the combined effort of agencies of government, law enforcement agencies and players in different sectors of the economy to fight the economic saboteurs.
Employing all kinds of tricks and deception, fake operators sell policies to unsuspecting members of the public and thus deny insurers legitimate income that would have generated tax revenue to government. In addition, they also increase the economic losses arising from unpaid claims.
He observed with disdain the way and manner in which insurance companies were disposing old and discarded headed papers. He noted that insurance firms fail to destroy old headed papers after change of logo or re-branding and the papers are discarded in public refuse bins which at the end of the day get into the hands of scavengers who in turn distribute to partners in crime.
Wiggle advised members of the public to always buy genuine insurance from licensed underwriters. But should they doubt whether the person selling insurance is genuine or not, they should call Nigerian Insurers Association or National Insurance Commission to verify.
However, he noted that if there are no buyers of fake insurance policies, the fake operators will dry up. He, therefore, accused exporters and importers who want to buy cheap insurance of aiding the flourishing fake insurance trade.