Credit note: Insurers battle non-remittance of premium amid no premium no cover policy

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Chuks Udo Okonta

Some concerned insurance operators have cried out over their plights in the hands of erring brokers who issue credit notes and refuse to remit premium as stated in the law.

The aggrieved underwriters said the No Premium No Cover policy is violated by these brokers with impunity.

They also expressed worry why there should be provision for issuance of credit notes when the industry is said to be under the No Premium No Cover regime.

They highlighted a current case that is before the National Insurance Commission (NAICOM) where a broker withheld a premium aside the 30 days grace period for credit note, adding that while the broker held the premium, a risk crystalised, and she ran to the insurance firm with premium seeking a claim.

They also implored the leadership of NAICOM to abolish the credit note policy as a means of strengthening the No Premium No Cover policy.

The Deputy President Nigerian Council of Registered Insurance Brokers (NCRIB);Mrs Ekeoma Ezeibe, said if it matter had come before NCRIB, it would have gone to the Council’s Investigation Panel and that if found to be true, the broker would have not only been made to pay, but would have been referred to the Disciplinary Tribunal by the Governing Board.

The Executive Secretary of the NCRIB Tope Adaramola, said the council does not condole any form of unethical practices, whilst calling on any underwriter with genuine case to report such a vice to the NCRIB.

Responding to the call to report erring brokers, the concern underwriters said they are often blacklist by brokers whenever such a step is taken.

They implored all stakeholders in the insurance business value chain to play according to stated rules, stressing that the industry can’t grow amid unethical behaviours.

Shareholders who are not also comfortable with the holding of premium have at different fora, queried underwriters about huge trade receivables in their yearly financial accounts, amid No Premium No Cover regime.

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