Commissioner for Insurance, NAICOM, Mr. Fola Daniel
Contrary to the belief that the management of Dana Air were refusing to pay for or unduly delaying the claims to a number of families of passengers that lost their lives in the ill-fated June 3 flight that killed 153 on board and 10 on the ground, the National Insurance Commission (NAICOM) has said one major factor was because some of the victims had insurance covers that were not paid for.
The commission made this revelation even as it was concluding arrangements to develop a reliable micro insurance framework aimed at deepening insurance penetration in the country.
Addressing business editors at a seminar on Micro Insurance in Ilorin, Kwara State, Commissioner for Insurance, NAICOM, Mr. Fola Daniel, also said part of delay was because many people were laying claim for one victim in many cases.
He noted that families of passengers with genuine and proper documentation have had their claims settled.
“There were people on that Dana plane whose insurance cover were not paid for. We have a situation where about 17 persons in a family are laying claims to one victim. We are doing very well, anyone that is yet to receive payment is as a result of improper documentation,” he said.
However, Daniel explained that the micro insurance framework, when developed, would spell out clear rules for investments and provide insurance firms the needed flexibility and freedom to use innovative means to reaching the large but underserved segment of the insurance market.
He believed the development of the micro insurance sector was crucial to realising the objective of unlocking the huge potential of the sector.
Daniel disclosed that the framework was a result of the comprehensive study carried out in collaboration with international development agencies, which showed huge gaps in the market among the low income groups.
According to him, in 2012, NAICOM in collaboration with GIZ Germany and other developmental agencies conducted a country-wide diagnosis study on the viability of micro-insurance in Nigeria.
He added: “One of our goals was to generate at the end of the exercise, a document that will enable us take evidence-based decision on the issue of micro-insurance in Nigeria and also serve as a public resource in its own right. The report revealed huge potentials among the low income groups and has consequently been adopted by NAICOM as a working document for the development of micro insurance framework in Nigeria.”
He listed some of the channels for selling microinsurance to include cooperative societies, banks and microfinance banks, community associations and other means to be determined by sellers.
The commissioner for insurance noted that the whole insurance sector in Nigeria currently contributed less than one per cent to gross domestic product but believed insurance sector could easily eclipse the banking sector if a larger percentage of the population bought insurance products.
He attributed the low insurance penetration to a number of factors including limited public awareness, prescriptive orientation of the Insurance Act 2003 and lack of confidence in insurance operators by the insuring and non-insuring public.
According to him, other measures being taken to expand the insurance sector, included the adoption of Takaful Insurance, which guidelines have already been exposed to stakeholders for input.
Daniel described the Takaful concept as one in which the insured persons or entities get a share of premiums paid if no claims are made unlike the conventional insurance where the insurers hold on to premiums.