The Commissioner for Insurance, Alhaji Kari Muhammad, has said that NAICOM will not go back on the Sept 30 deadline for insurance companies to clear all outstanding claims of policy holders.
“Other reasons for implementing such deadline and sanctions are effective trade practices and fair treatment of policy holders and intending consumers,” he said.
Muhammad said for Nigeria’s insurance industry to be relevant, the prescribed standard of practice set by the commission should be implemented.
He said the claims Management Guidelines document requires each insurer to develop, document and implement claims management and payment policies.
The commissioner expressed dissatisfaction with large numbers of unpaid claims by insurance firms, including those with robust capital bases.
Muhammad said if the situation was allowed to continue, the growth of the industry would be stalled, noting that the current industry level was still below 35 per cent.
“Also, policy buyers and intending ones will easily lose confidence in the sector as it deepens the poor image of insurance practice in Nigeria,” he said.
Muhammad said NAICOM was determined to check bad practices in the industry through effective claims management and ensure adherence to global standards.
He commended his predecessor in office, Mr Fola Daniel, for designing policies that encouraged growth in the industry.
“Before 2007, the industry capitalisation was just N98bn with 11 per cent growth rate,” Muhammad said and added that the former management settled complaints worth N4.2bn.
NAN recalls that NAICOM, in a circular on July 6 gave insurance firms up to September 30 to clear all outstanding claims of customers or be sanctioned.
The commission said from October 1, it would invoke the law and punish defaulting firms.