By ROSEMARY ONUOHA

Controversy is brewing in the insurance industry as the National Insurance Commission (NAICOM) has failed to provide a uniform set of rates for the compulsory insurance products under the Market Development and Restructuring Initiative (MDRI).

According to stakeholders the failure by the regulator to dictate the prices of the products will lead to indiscriminate pricing and subsequent undercutting.

The MDRI is a program of NAICOM to deepen insurance penetration in the country as well as enforce the compulsory insurances as stipulated by the Insurance Act, 2003.

The products are the Third Party Motor Insurance (Section 68 of Insurance Act, 2003); Builders Liability (Section 64 of Insurance Act, 2003); and the Occupiers’ Liability (Section 65 of Insurance Act, 2003). Others are the Health Care Professional Indemnity of Section 45 of the Nigerian Health Insurance Scheme, 1995 and the statutory group life of Section 3(2) and Section 9(3) of the Pension Reform Act, 2004.

Recently, NAICOM commenced the enforcement of the compulsory insurances and has gone to the extent of arresting people involved in the sale of fake insurance certificates.

However practitioners are worried that all manner of pricing is bound to crop up in the face of competition as insurers’ jostle to control significant stake in the selling of the compulsory insurances policy. Mr. Bayo Ajidagba of Industrial & General Insurance Plc told Vanguard that insurance practitioners are worried because NAICOM did not provide a uniform set of rates for practitioners as such there is room for indiscipline.

In his words, “The MDRI is a good initiative, but at what rate are we going to sell the products? There should be a universal rate but so far NAICOM is yet to address that.” Before now, Mr. Wole Oshin, Managing Director of Custodian & Allied Insurance Plc noted that the compulsory insurance policies might be embraced by the populace when the regulatory body creates the necessary awareness and enforcement because operators said that they cannot commence implementation of the compulsory insurances without NAICOM’s guide lines.

As it is, NAICOM has commenced some form of enforcement, but has not provided the premium rates that will guide the selling of the products.

Between 1987 and 2004, a total of 16 insurance products were made compulsory by means of statutory provisions. Even among the five compulsory insurances, only the third party motor insurance has enjoyed the desired popularity due to activities of law enforcement agents concerning the scheme.

Daniel said that the initiative was for the preservation of income, national wealth, human and material resources that these insurance products are made compulsory. Heavy fines and prison terms are imposed by relevant sections of the laws for non-compliance.

In his words “I strongly believe that one of the aims of compulsory insurance is to instill responsibility into all stakeholders. It is sad that notwithstanding the existence of these compulsory insurance products, people still die in motor accidents or during collapsed buildings without any form of compensation.”