The National Insurance Commission (NAICOM) is to begin sanctioning insurance companies that refuse to pay genuine claims to their policyholders from October 1 this year.
From that date, defaulting insurers will be made to pay fine, while NAICOM will also withdraw the operating licence of any insurer that fail to pay claims promptly.
In a circular to all insurance companies signed by NAICOM’s Commissioner (Technical), Mohammed Kari, the commission stated that it has confirmed some insurance firms were always shirking their responsibility when the need to pay claim arises, thereby continue to tarnish the image of the entire insurance industry.
The circular titled “Claims Settlement And The Image Of The Insurance Industry” reads in part: “In the continued effort of the commission to sanitise the industry of this unpalatable tags and restore the confidence of the insuring public, all insurers are hereby directed to note that:
“Henceforth, all claims must be handled strictly in accordance with the provisions of the Insurance Act 2003.
“As a palliative gesture, the commission shall allow a grace period until the 31st September 2015, for companies to clear all backlogs of outstanding claims as provided by the Insurance Act.
“From 1st October, the commission shall evoke the full application of punitive sections of the Insurance Act, including but not limited to, sections 8(1)(m), 70(2) without further recourse.”
NAICOM had earlier collated claims details from insurance companies and complains on delayed and unsettled claims from members of the insuring public in its efforts to verify the persistent complains of the consumers of insurance about an unsavoury attitude of the insurers that has brought the industry to disrepute.
The commission pointed out that its study of the records and complains received, confirmed that some insurers were actually shying away from payment of claims, lamenting that this ugly development has been rubbing off negatively on the good insurance companies.