A university lecturer, Prof. Taiwo Osipitan, has advised the National Insurance Commission (NAICOM) to compel insurance brokers to pay interests on premium that were not remitted to underwriters within 30 days of collection.

Osipitan of the Faculty of Law at University of Lagos told the News Agency of Nigeria (NAN) in Lagos on Thursday that this would check non_remittance of premium to insurance companies.

According to him, the interests should be calculated with effect from 30 days after the collection of the premium, adding “Prompt payment of premium and immediate settlement of accepted claims are the twin pillars on which the conduct of insurance business stand.”

Osipitan stated “Delay in the payment of agreed claims may defeat the aspiration of the insured. The interest is to check the excesses of brokers who collect premium without remitting same. This is the reason for the provision of Section 50 (1) of the Insurance Act, 2003 which provides that receipt of a premium shall be condition precedent to a valid insurance contract.”

Osipitan said that the Section (50) 1 gave legitimacy to no premium no cover clause but that the section, however, failed to prescribe sanction for any insurer who underwrote a risk or issued certificate of insurance without collecting premium immediately or within a specific time frame.

The lecturer said that insurance companies had always waived this provision because of competition and the fear that brokers would stop bringing businesses to them.

He said that the measure would also check the high incidence of rate cutting where companies reduce the premium chargeable on insurance businesses by giving unauthorised rebates.