Omosehin: Motor Insurance Rate Will Accelerate Claims Payment On Motor Policies
The Nigerian Insurers Association (NIA), has said that the new motor insurance rates released by the National Insurance Commission (NAICOM), January 1, 2023 would, if supported by Nigerians, lead to adequate claims payment on motor insurance polices.
NIA also expressed optimism that President Muhammadu Buhari would accent to the 2020 Consolidated Insurance Bill before the tenure of the Ninth National Assembly ends.
NIA Chairman, Mr Olusegun Omosehin, stated these at a news conference in Lagos and said the association was in full support of the new premium rates released by NAICOM and has indeed taken steps to ensure that members comply and join in the publicity initiatives that would follow shortly.
“The Association is embarking on stakeholder engagement as a first layer interface with the critical stakeholders to ensure their buy in and support. We do not need to restate the issues with enforcement of the old rates, but we are confident that with your usual support and the understanding of the Nigerian public, Nigerians will support the new rates and this will not only lead to increase in premium income for underwriters but also increase in claims payment to the clients.
He further said that the Ecowas Risk (risk arising from travelers from West African countries) and others is covered under the new premium rates.
NAICOM had on December 22; 2022 through a circular to all insurance chief executives announced 200 percent increase on premium payable on Motor Third Party Insurance and others adding that the comprehensive motor insurance policy premium rate should henceforth not be less than 5 percent of the sum insured after all rebates/ discounts.
The new rates contained in the circular which takes effect from January 1, 2023 are as follows: private vehicles that were paying N5, 000 premium to get N1 million claims in case of death or permanent disability under Motor Third Party Property Damage (TPPD) limit, are now to pay N15, 000 premium to make N3 million claims while owner good vehicles are to pay N20, 000 premium for N5 million claims.
Staff busses to pay N20, 000 premium for N3 million claims while commercial trucks and general cartage, are to pay N100, 000 premium for N5 million TPPD limit; tricycles N5, 000 for N2 million TPPD limit, and motor cycles N3, 000 for N1 million TPPD limit.
The commission noted that failure to comply with this circular shall attract appropriate regulatory sanctions.
Omoshehin said that the consolidated insurance bill proposed since 2020 for review of the Insurance Act 2003, had been passed.
He explained that the bill was currently going through the remaining legislative procedures preparatory to the presidential accent.