• Continuous violations constitute a ground for cancellation of licence of insurance operators
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Chuks Udo Okonta
The Insurance Industry Consolidated Bill, has barred insurance companies from granting any discount or rebate in the approved rate of premium in respect of insurance made compulsory by law unless such discount or rebate is approved by the National Insurance Commission (NAICOM).
According to the Bill, which if all things been possible may soon be signed into law by President Muhammadu Bihari, any insurance operator who offers or receives any rebate otherwise than as provided for in subsection (3) of this section – (a) is liable to a penalty of 10 times the amount of rebate offered or received; and (b) shall constitute a ground for the cancellation of the licence of the insurance operator under this Bill, where the contravention is continuous.
“An insurer shall not grant any discount or rebate in the approved rate of premium in respect of insurance made compulsory by law unless such discount or rebate is approved by the Commission. (2) An insurer who contravenes the provisions of subsection (1) of this section, is liable to a penalty of 5 times the amount of premium chargeable.
“A person shall not offer or receive, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance contract, any rebate of the – (a) whole or part of the commission payable under this Bill; or (b) premium shown on the policy, except such rebate as may be approved by the Commission and published in the prospectus or table of rates of the insurer,” the Bill stated.