By Bisi Bamishe
The Nigerian Insurers Association (NIA) has bemoaned the reduced rate of third party motor insurance by insurers.
Consequently, the Association has threatened to report erring members to the regulatory body, National Insurance Commission (NAICOM), inoder to bring sanity to the risk bearing industry.
In a circular titled, NIA.MTPC/YI/23, ‘Adherence To The Approved Rates For Motor Insurance’, dated May 24, 2023 and sent to all Chief Executive Officers of member companies operating general insurance business by the. Director-General of NIA, Mrs. Yetunde Ilori, NIA expressed displeasure over its members companies involved in defaulting in the implementation of the new rate for motor insurances fixed by the National Insurance Commission (NAICOM).
It would be recalled that NAICOM announced a new rate regime for motor insurances which kicked off on January 1st, 2023. Third party motor insurance cover was increased from N5,000 to N15,000.
However, the association said it has received reports that some insurance companies are selling motor insurance policy below approved rates of N15,000 for third party aand threatened to report defaulters to the Commission.
Mrs. Ilori noted that following the decision reached at the 2023 CEOs retreat in respect of the need to implement the new premium rates on motor insurance, it has become pertinent for the association to reiterate the need for companies to sell motor insurance policies at the approved rates.
She stated that secretariat has received reports that some companies are selling below the approved rates, stressing that this does not augur well for growth of the market even as it brings serious reputation issues to the industry.
According to her, NIA Governing Council is displeased with the activities of agents within licensing offices engaged by member companies to sell third party motor insurance at reduced rates and other such arrangements.
Ilori warned that NIA would not hesitate to report defaulting companies to NAICOM, adding that companies are therefore enjoined to ensure compliance to avoid regulatory sanction
