NAICOM lists comsumer behavioural threats to insurance contracts

by Modestus Anaesoronye

February 7, 2018 | 12:43 am
  |     |     |   Start Conversation

Industry regulator, the National Insurance Commission (NAICOM) has identified consumer relationship behaviours with service providers, including underwriters and intermediaries that undermine service efficiency and compliance.

The commission pointed that its responsibility to give adequate protection to the consumer is weakened, when the consumer does not play according to the rules guiding the contract of insurance.

Mohammed Kari, commissioner for Insurance/CEO of NAICOM said the commission has in recent time noticed certain behaviours and actions of consumers that are not in psych with this believe, which is detrimental and dangerous to the insurance industry in Nigeria.

“We have seen situations where the insured (Consumer) in connivance with insurance Brokers allot proportion of risk to local underwriters without due cognisance of the insurers’ capacity; preferring to place risk abroad even when the local market is not saturated.”

“Some consumers also in alliance with intermediaries chose to exclude some underwriters from participation in underwriting certain risks without cogent tenable justification.”

Kari who spoke at the First Interactive Session with Insurance Consumers organized by NAICOM held in Lagos said “The Commission frowns at these practices and want to use this medium to inform such consumers to desist from the practices as they run counter to industry regulations.”

“Where we have noticed such practices, we have rejected applications from operators for approval to cede such risks abroad. This action of the consumer/broker sometime leads to delays in placement of the risk even when the insured has paid its premium to the intermediary.”

According Kari, while the Commission is not averse to ceding of risk offshore, it must be done only when the local market has taken the much its capacity would allow.”

Other areas where the regulator frowned at include direct involvement of the insured with reinsurance placement of their Insurances.

“Once the consumer places his risks with the insurer, whether direct or through a broker, he or the broker has no role in the placement of the reinsurance. On this note, I would like to remind consumers that the Nigerian Insurance space should only be occupied by insurance institutions licensed and regulated by NAICOM. We would not accept insurances placed through a non licensed operator in this market.

Kari also pointed on delays in submitting evaluation results of bidding processes to the Commission; delays by the insured in issuing placement/ renewal instruction to the insurer. “These delays, more often than not, makes it impossible for the insurer to meet the application period for the placement of excess risks offshore where applicable.”

Also identified by the Commission is the emerging practice of supposed premium funding by local brokers on behalf of the insured.”

He further stated that these are trends that are not only dangerous to the insurance industry but also to the consumer. “We ask you to desist from these practices because they are neither in your best interest nor that of the insurance operator and of course, that of our nation. We also crave the understanding and cooperation of the consumers to ensure compliance with our laws and regulations particularly the Insurance Act 2003 and the Local Content Act.”

Modestus  Anaesoronye

by Modestus Anaesoronye

February 7, 2018 | 12:43 am
12893  |   93   |   0  |   Start Conversation

Big Read |  

Does Conoil need a makeover?

Does Conoil need a makeover?

One of Nigeria’s oldest company, Conoil Plc is looking like a company in need of a game changer as its...

MTN Felele

Banking App