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Chuks Udo Okonta
Having successfully implemented increase of motor third party premium from N5,000 to N15,000 for three months and 21 days, stakeholders in insurance industry, have applauded National Insurance Commission (NAICOM) for not caving in to pressures to rescind the policy.
According to NAICOM, the policy has fared well, as people are complying. It noted that it would soon commenced a nation wide media campaign to educate the public on benefits derivable from the policy.
The National Coordinator Independent Shareholders Association of Nigeria (ISAN) Moses Igbrude, said the decision taken by NAICOM not to rescind the policy, despite pressures from different quarters, is commendable.
According to him, the adjustment in motor insurance premium is welcomed, especially now that inflation has raised cost of buying and fixing vehicles.
He called on NAICOM and insurance operators to move out of their conform zones to educate people on the enormous benefits attached to the policy.
Igbrude noted that people would naturally resist increase, if they are not adequately enlightened on benefits from the policy.
He also charged insurers to fully comply with the policy, stressing that the policy is expected to increase profitability of companies, which should also amount to dividends to shareholders.
Past Director, Corporate Communications, Chartered Insurance Institute of Nigeria (CIIN) Obah Joseph, said many people wanted NAICOM to rescind the policy, but it stood its ground, noting that such a feat, should be commended.
He went further to implored stakeholders to support NAICOM in educating the masses on essence of insurance.
According to him, NAICOM and insurance operators should leverage all media platforms to educate people on what they stand to benefit from the policy.
NAICOM had on January 1, 2023, increased premium of private third party motor insurance policy from N5,000 to N15,000 and Third Party Property Damage (TPPD) limit from N1 million to N3 million.
The approval was contained in a circular entitled; New Premium Rate for Motor Insurance: numbered: NAICOM/DPR/CIR/46/2022, dated; December 22, 2022; signed by the Director, Policy and Regulation, NAICOM, Leo Akah for the Commissioner for Insurance Sunday Thomas and sent to all insurance Institutions.
NAICOM stated that pursuant to the exercise of its functional of approving rates of insurance premium under Section 7 of NAICOM Act 1997 and other extant laws, the commission hereby issued this circular on the new motor insurance premium rates effective from January 1, 2023.
NAICOM pegged N3 million Third Party Property Damage (TPPD) limit for private motor; N5 million limit for own goods, with premium of N20,000; staff bus premium, N20,000 and TPPD, N3 million.
For commercial vehicles, trucks/general cartage has TPPD limit of N5 million, premium N100,000; special types, TPPD limit of N3 million, premium N20,000; tricycle, TPPD limit N2 million, premium N5000 and motorcycle, TPPD limit N1 million; premium N3000.
The insurance industry regulator submitted that comprehensive motor insurance policy premium rate shall not be less than five per cent of the sum insured after all rebates or discounts.
NAICOM was inundated with different calls to withdraw the policy when it was announced. Some groups threatened to take legal actions against the commission, but it refused the rescinded the policy.
