IGI Boss Calls for Review of ‘No Premium No Cover Regulation’
The Group Managing Director of the Industrial and General Insurance Plc. (IGI) Mr. Rotimi Fashola, has called for a review of the No Premium No Cover insurance law in order to give consideration to some government agencies that depend on their budget allocation for their expenses.
While speaking at the bi-monthly brokers evening held recently in Lagos, Fashola said the insurance industry was losing a lot of businesses as a result of their insistence on implementation of the policy and that the losses were more from government agencies who depend on annual budgets for their spending, adding that most of such agencies have decided not to renew their insurance contracts since the implementation of the policy.
He submitted further that the industry stands the risk of losing more businesses in future due to the same problem if nothing is done.
In his response, former Executive Secretary of The Nigerian Council of Registered Insurance Brokers (NCRIB), Mr. Remi Alor said there was no going back on the law which he said had led a major turnaround for the industry.
Commenting on the impact of the policy on the performance of the industry, the Commissioner for Insurance, Mr Fola Daniel said, “The best thing that happened to the insurance industry in the last two years was the implementation of the No premium no cover regulation. Last year was a year of test and evaluation and from what I have, I think no premium no cover was very successful. I am surprised that the implementation of the ‘No premium no cover in Nigeria is generating followership. As soon as we succeeded in implementing it, other countries in Africa started copying us.”
Speaking on the effects on the financials of insurance firms the commissioner said “We saw that in the financials of many insurance firms, it has a very huge positive impact. The cash flow position was very good to the extent that we justifiably refused to tolerate non-settlement of claims and delayed settlement of claims because the reason for non-settlement of claims was the incidence of non-payment of premium. So it was very successful.”
The federal government had in January 1, 2013 commenced the implementation of ‘No premium no cover’ aspect of the Insurance Act 2013. According to the Act, insurance policies are deemed purchased and the insured covered by insurance only if the policy buyer has duly paid the specified premium for the policy purchased.
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