By Favour Nnabugwu

Twelve insurance companies owe the Nigeria Police Force N63.9million claims on Group Personal Accident (GPA) account for 2008/2009.

The 12 insurance companies led by Industrial and General Insurance (IGI), Vanguard investigations reveal, are yet to settle the Police Force on batch 10 and batch 11 claims for that year.

The other co-insurance companies on the 2008/2009 police GPA are Equity; Regency; A&G; Staco; Oasis; Great Nigeria Insurance; Fin Insurance; Standard Alliance; Intercontinental Wapic; Sovereign Trust and Niger Insurance.

Investigation by Vanguard revealed that the lead insurance company which led the account with 30 per cent for two years 2007/2008 and 2008/2009 is responsible for claims to the Police Force even after the account has been taken from IGI.

Collation of the co-insurers that had 5 per cent each on the account solely rest on the lead underwriter.

Besides, the National Insurance Commission (NAICOM) had said the lead insurer on any business is responsible for claims on such account where a consortium of insurance companies is jointly participating in the business.

The Insurance regulator said, “It shall be sole responsibility of the lead insurer to pay the claims arising from such a business in order to ensure prompt claims payment of all genuine claims.

Although the liability of members of the consortium shall be jointly and several amongst themselves, it is the responsibility of the leader of the consortium to coordinate the processing of the insured claim and issue a single discharge voucher followed by issuance and delivery of cheque in settlement of the entire claim within 90 days.” This is based on the guidelines for oil and gas business in Nigeria recently issued by NAICOM.

It was also expressly stated that where a member of the consortium fails to settle a claim, the leader of the consortium must settle the claim in full. The guidelines maintain that claims shall be administered in accordance with the standard insurance practice, except that in case of a consortium, settlement of claims shall be the sole responsibility of the leader.

The commission stressed that all discharged claims shall be settled immediately as prescribed by the Insurance Act 2003; NAICOM warned that failure to settle discharged claims shall attract sanctions as stipulated by Sections 70(2) of the Insurance Act.

The guidelines emphasized that consistent failure to settle discharged claims promptly may lead to the withdrawal of the licence of the insurer as stipulated in Section 8(1)(m) of the Insurance Act 2003 and the insurer may be wound up by the commission in accordance with the provisions of sections 8 and 32(1)(b) of the Insurance Act.