Gambia: Insurance Companies Implement ‘No Premium, No Cover’ Policy


All the insurance companies in The Gambia have started to implement the “No premium, No cover” policy with effect from January this year, as part of the measures to reform the industry.

This means that henceforth, insurance companies have to collect premiums upfront before providing insurance cover for all classes of insurance.

Put differently, it implies that insurance companies will no longer be required to sell insurance products on credit to customers.

The Insurance Association of The Gambia (IAG) – umbrella body of all insurance companies in The Gambia – said the ‘No premium, No cover’ policy is neither a creation of the association nor a new regulation. It is a statutory provision in the Insurance Act, 2003 but its implementation has not been enforced since the enactment of the law.

Section 63 (1) of the Act states: “The receipt of an insurance premium shall be a condition precedent to a valid contract of insurance and there shall be no cover in respect of an insurance risk, unless the premium is paid in advance.”

Enforcement of this provision at this point is to check the perennial problem of unpaid premium that is rocking The Gambia insurance industry.

Hitherto, it has been noted that some unscrupulous people jump from one insurance company to another, every year, to take insurance cover on credit and never pay.

Officials of IAG secretariat say non-payment of premiums affect the ability of insurance companies to meet their financial obligations such as solvency margin and the payment of claims promptly and adequately.

Consequently, to guard against this menace, no insurer shall grant insurance cover without having received full premium or premium receipt notification from the relevant insurance broker.

Any insurance contract issued contrary to this lawful provision has made an offence punishable by the Regulators under Guide line Three on “No premium, no cover ”

While craving the indulgence of the general public about newly enforced measure, the IAG noted with pride that so far, the reaction from the insuring public has been satisfactory.

Apart from the implementation of the ‘No premium, No cover’, the IAG will continue to consult with the Central Bank on the proposed reforms made by the Insurance Association as the industry’s contributions to the Bank’s planned reforms to help the companies become more viable.

These reforms are to strengthen the industry to be able to play its rightful role in the economic development of The Gambia and have the muscle to compete more effectively with other multinationals in the international market.

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