Thomas
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Chuks Udo Okonta
I can feel the anger and pain of all claimants and I assure them that we are doing everything in our power to address the issue of unpaid claims, the Commissioner for Insurance, Sunday Thomas, has said.
Thomas said this when responding to enquiries by journalists on what the National Insurance Commission (NAICOM) is doing to address the challenge of unpaid claims by some underwriters.
He noted that he is deeply pained by the inability of the companies to pay claims to the aggrieved policyholders, stressing that NAICOM is concerned about the affairs of policyholders and other stakeholders.
When asked if the commission can stop the companies from receiving new businesses and why it has not done so, Thomas said: “Yes, we can and we have done it before. We have stopped some companies from taking new business but we don’t have to announce it.
“We are concerned about all the stakeholders. The law requires us to be concerned about the policyholders and other stakeholders. I can feel the anger and pain of all claimants and I assure them that we are doing everything in our power to address the issue.”
On why NAICOM is not paying claimants from statutory deposits of erring firms, he said “We don’t want a situation that will bring about a run on the insurance sector. Imagine today, if somebody complains that he cannot get his money from the bank and CBN pays from the bank’s deposit. What do you think will happen to even those who don’t have issues accessing their funds? There is a likelihood that they will think that something is wrong. People will run to both healthy and unhealthy companies to withdraw their money and the company will die even before its time.
“But beyond this, the statutory deposit is mostly small and may not be able to pay off all liabilities. So how do we approach this? The most likely thing is that we are going to have to do it on a first-come, first-serve basis. Will this be fair to all? The largest amount in their statutory deposit is probably around N300 million for life and non-life companies while composite companies have N500 million. So how many claims can we pay with this? If, for instance, a corporate concern like Mobil applies to the deposit for an outstanding claim, what will be left to use for small policyholders that have smaller claims to collect? What are you going to tell them? The option is there to be used and we believe that some of the steps that we are taking when what will be in the statutory deposit will be big enough, things will be different. In any case, we don’t believe that we will still have companies that will be owing to the extent of us trying to access their statutory deposit.”
Determined to savage the image of the insurance sector, the Nigerian Insurers Association (NIA) had published the expulsion of Industrial and General Insurance Limited;Niger Insurance Plc and Standard Alliance Insurance Plc for failing to meet obligations to policyholders. The firms were asked to cease forthwith from using the NIA logo on their letterheads and other official documents.
