The National Insurance Commission (NAICOM) has advised insurance customers to eschew all forms of engagement with unlicensed operators in the insurance industry as well as allotting proportion of risk to local underwriters without due cognisance of the insurers’ capacity.
This is even as it described the placement of risks on foreign underwriting insurance and re-insurance entities is in violation of the enabling Insurance Act 2003 regulating the industry.
The commissioner for Insurance, Mohammed Kari, who gave the advice while addressing journalists in Lagos, noted that some customers working in collaboration with some intermediaries usually exclude some underwriters from underwriting their risks without tenable justification.
He, therefore, said that the Commission would not accept risks under-written by non-licensed players as doing otherwise will undermine efforts by the government to grow the industry, particularly its contributions to the nation’s Gross Domestic Product (GDP).
Kari clarified: “Some insured in alliance with intermediaries, chose to exclude some underwriters from participating in underwriting certain risks without cogent tenable justification
“Once the consumer places his risks with the insurer, whether direct or through a broker, he or the broker has no role in the placement of the reinsurance. We would not accept insurances placed through a non-licensed operator in this market.
“Where we have noticed such practices, we have rejected applications from operators for approval to cede such risks abroad. This action of the consumer and broker sometime leads to delays in placement of the risk even when the insured has paid its premium to the intermediary. While the Commission is not averse to ceding of risk offshore, it must be done only when the local market has taken the much its capacity would allow”, the NAICOM boss added.
He listed other areas where the regulatory institution was still having challenges with customers as including, delays in submitting evaluation results of bidding processes to the Commission, the emerging practice of supposed premium funding by local brokers on behalf of the insured and delays by the insured in issuing placement and renewal instruction to the insurer.
While pointing out that the delays, more often than not, make it impossible for the insurer to meet the application period for the placement of excess risks offshore where applicable., Kari lamented that the ugly trends were not only dangerous to the industry, but to the consumer.
On some of the measures being undertaking by the Commission to ensure improved consumer awareness through effective communication, the seasoned insurer said that the establishment and recent upgrade of the Complaint Bureau Unit were aimed at dealing promptly with complaints from members of the public against any insurance operator as well as to respond to their inquiries.
He explained: “This unit has recently been upgraded and is headed by a Deputy Director to attend to aggrieved consumers. Many aggrieved consumers have continued to access this desk to register their complaints with us. We advise you to take advantage of this desk and report your challenges to us and I assure you that any company found in default shall be compelled to do the needful”.