Immediate past Chairman of the Nigerian Insurers Association, NIA, Mr. Eddie Efekoha, speaks on how operators are complying with the rates on compulsory insurances and other issues. Excerpt
By Cynthia Alo
HOW true is it that some insurance companies are still under-cutting on compulsory insurances?
On the standard rates for some classes of insurance as announced by the National Insurance Commission, NAICOM, we actually needed enforcement of the compulsory insurances because we needed some bit of progress.
We had the compulsory insurances as part of our laws for such a long time but nothing was happening as regards that. Consequently, after dialogue and consultations, NAICOM came up with the minimum rates on the compulsory insurances.
Since then, I wouldn’t say that insurers are still under-cutting. If there was any undercutting scenario, NAICOM is so empowered to penalize anybody for undercutting.
As an underwriter, if I was underwriting an account and insisted on keeping with NAICOM’s regulation, and that made me to lose the account to somebody who decided to do something different. Why should I sit aloof and fold my arms without reporting to NAICOM? I should be able to report because there is a loss of income from my books in an attempt to comply with the law.
How has the Nigerian Insurance Industry Database, NIID, been able to check fake motor certificate in the country?
The NIID is a pet project of the NIA and in the last two years we have continued to improve on it. The NIID now have Unstructured Supplementary Service Data, USSD, where you can now check the validity of your policy on any phone. The NIID have also helped to check cases of duplication of certificates and have afforded members to spot fraudulent cases. We have had cases where somebody made a claim from up to five insurance companies. So the NIID have been improved to the level that you cannot insure a vehicle twice. So the system has been improved and the ability to check the validity of policies has also improved as far as the NIID is concerned.
How are operators complying with micro insurance guideline recently released by NAICOM?
Well we are still reviewing the micro insurance guideline under the harmonised goals. Once the harmonised goals are finalized, the guideline will be clarified. However, NAICOM feels now unlike before that they need to truly deepen insurance penetration.
The only way of appraising the performance of anybody or the regulator will be through penetration. The Commission appreciates that and is doing everything to ensure that penetration improves. That is why under the harmonised goals, the emphases have now shifted on penetration and that is where micro insurance is coming in.