The Nigerian Insurance Reform Bill, currently waiting for the president’s assent, will enhance consumer protection by creating a compensation fund for victims of liquidated insurance companies.
Kunle Ahmed, chairman of the Nigerian Insurers Association (NIA), who made the disclosure during a quarterly press conference in Lagos Tuesday, said the bill will also set up fund for uninsured road accident victims.
Ahmed said the bill is a significant piece of legislation aimed at overhauling the regulatory framework of the insurance sector in Nigeria.
“The Insurance Reform Bill includes provisions designed to protect policyholders adequately. A fund has been set aside to meet requests of policyholders whose primary insurance company is liquidated or faces challenges, addressing recent occurrences in the industry.”
Additionally, a fund is included in the bill for uninsured road accident victims, Ahmed said.
According to him, these sections of the bill are expected to enhance trust in the insurance industry.
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“The bill also reflects increased capital requirements, which we believe will lead to stronger and more virile insurance companies that can develop new products and address the pain points of consumers.”
On the ongoing tax reform bill at the National Assembly, he said that the NIA has made a representation to the government regarding the taxation of insurance premiums, emphasising that some premium belongs to shareholders.
“Changes to any tax bill could impact various sectors of the economy, including insurance. We have made a representation to the government regarding the taxation of insurance premiums, emphasising that some premium belongs to shareholders, especially on the life insurance side, and this concern is being taken seriously.”
On the enforcement of third party motor insurance in Nigeria, Ahmed commended the inspector general of police and the commissioner for insurance for their commitment to protect Nigerians on the road.
“For us at NIA, the enforcement of the third-party policy is largely to the benefit of policyholders.
“Policyholders are entitled to compensation for their liabilities in terms of injury or death to third parties, which is unlimited.”
According to him, member companies of the NIA have seen slight growth in third-party policies since the pronouncement, but noting the figures are not handy.
While emphasising the importance of claims payment in the industry, he said the hallmark of any licensed insurance company is the timely payment of claims.
“Insurance companies are ready and willing to pay valid claims. The enforcement of the third-party policy is a welcome development for the economy, for the insurance companies, and for policyholders.”
“We expect to see a situation whereby motorists do not get out of their cars and fight when accidents occur.
“Despite the amount paid in claims, we believe there is more to achieve in terms of the ease and timeliness of claims payments.”
Ahmed said the industry is working to harmonise claims process to limit the number of documents required for claims to be paid.
According to him, the industry has grown significantly, noting that while non-life business has seen notable growth, largely driven by fire and oil and gas policy, the life business has also experienced growth, driven by group life policy.
“The growth we have seen is likely to be sustained, and we will have a very vibrant and growing insurance market in Nigeria.
“Apart from the big numbers around gross written premium (GWP), I also think we have grown our net assets as an industry.”
