|Mr. Fola Daniel
Commissioner for Insurance
The National Insurance Commission (NAICOM) has directed all insurance companies in the country to pay all outstanding claims by September 31, 2015 or face punitive measures.
It said the commission would invoke the full application of punitive sections of the Insurance Act without further recourse should any insurance company be found wanting after the expiration of the deadline.
The insurance regulator in a circular to all insurance companies, a copy which was made available to THISDAY, further directed that henceforth, all claims must be handled strictly in accordance with the provision of the Insurance Act, 2003.
The circular, signed by Deputy Commissioner for Insurance (Technical), Mr. Mohammed Kari, added:”As a palliative gesture, the commission shall allow for a grace period until the 31st September, 2015 for companies to clear all backlogs of outstanding claims as provided by the insurance Act.”
It added:”From 1st October, 2015, the commission shall evoke the full application of punitive sections of the Insurance Act including but not limited to sections 8(1) (m), 70(1) (b), and 70(2) without further recourse.”
The commission also noted that the latest directive represented a last warning to insurers who fail to settle genuine claims on the consequences of their action.
It said NAICOM had given three months of grace to enable them settle all outstanding claims in their books after which the regulators would be left with no other option than to apply provisions of extant laws on offenders without delay.
However, it stated that an investigation into its records and complaints from the insuring public had confirmed the truth of the accusation that some insurance companies had not been paying claims.
But it added that the investigation revealed that a few insurance companies were engaged in such unwholesome practice which had made nonsense of the efforts of many other well-behaved companies.
The commission stated that the latest directive was part of its efforts to sanitise the industry and restore the confidence of the insuring public in insurance services.
It said: “The commission collated claims details from all insurance companies and complaints on delayed and unsettled claims from members of the insuring public in its efforts to verify the persistent complaints of the consumers of insurance about an unsavory attitude of the providers that has brought the image of the industry to disrepute.”
The outgoing Commissioner for Insurance, Mr. Fola Daniel, had explained that complaints over non-payment of claims had gone down tremendously in the past few years.
In an interview with THISDAY, Daniel had said, that failure to settle claims and delay claims settlement is fading into the past.
“We have a dedicated complaints bureau in the commission and at the time we set up the bureau, what we said then was that the bureau would be mandated to handle complaints on claims. As at 2007, we had a huge complaint of an average of 10 in a week but in 2008 and 2009, the situation has improved because for two to three weeks we did not get complaints from the people. The few complaints that are now coming are dealt with dispatch. However, we cannot take every complaint from the members of the public as the whole truth. Equity demands that you find out from the complainant and the guy being complained against. So we put this together and we insist insurance company must act in accordance with the law.
“I’m sure you are aware we took some regulatory decisions against some insurance operators, which included suspension of licence, even taking over of management of these companies. They are largely to do with our dissatisfaction with certain things because I believe personally, as a professional, the best advertisement you can offer is prompt claims settlement. To settle claims of one person, you will certainly win more converts.”