Members of the Insurance Consumers Association of Nigeria have implored the National Insurance Commission (NAICOM) to reverse its recent policy directive on the increase of 3rd party motor insurance premium in the country.
Recall that earlier this month, the agency had announced an increase of 200 – 400 percent on the Third Party Motor Insurance Premium for different categories of Motor Vehicles in the country and by implication giving only one (1) week notice to the Insuring public of Nigeria to comply.
The Insurance Consumer Association, in a statement made available to the newsmen by its national coordinator and a former President-General of the Central Council of Ibadan Indigenes, CCII,Chief Yemi Soladoye, described the move as self-serving and detrimental.
Chief Soladoye added that failure to reverse the directive will amount to giving a severe punishment to the Nigerian Insurance Consumers who provide the income that accrue to the entire Insurance Industry.
INTRODUCTION
We, the Insurance Consumers Association of Nigeria (an affiliate of the Federal Competition and Consumers Protection Commission of Nigeria) hereby once again introduce ourselves to you as an organization established in 2010 with objectives to 1) Speak for the Aggrieved Nigerians on Insurance Matters and 2) Promote the adoption of Insurance Mechanism in Nigeria among others.
We hereby write with respect to your Circular No.: NAICOM/DPR/CIR.46/2022 dated 22nd December 2022, incensing the Third Party Motor Insurance Premium in Nigeria by 200-400% for different categories of Motor Vehicles and by implication giving only one (1) week notice to the Insuring public of Nigeria to comply.
OUR DEMANDS
We hereby demand that the Directive be reversed as it amounts to a deliberate breach of the fundamental Principle of the Utmost Good Faith and other decent regulatory principles that guide Insurance practice on your part. Our demand for the reversal of the Directive is based on the following facts:
1. You filed to understand the full implications of your Directive that the real organ you will punish is the Nigerian Insurance Consumers who provide the income that accrue to the entire Insurance Industry. Though, you threatened to sanction your Insurance Operators that may fail to comply with your directive come | January 2023, yet, the truth of the matter is that your Operators and yourself will be the beneficiaries of the windfall that will accrue from the Directive while the Insurance Consumers, are in the real sense of it, the ones being sanctioned. The almost 20 million Motor Insurance Consumers in Nigeria deserve more than one (1) week notice from you.
2. We are not impressed by your corresponding increase in the Indemnity Limit to N3.0m etc. as the questions on the lips of our Members are – 1) who requested for this increase to N3.0m, 2) how many claims have you really settled even when the limit was N1.0m, 3) are you not aware that many fleet owners on their own volition do pay extra premium to the underwriters to increase their PPD Limit to N5.0m and 4) Where are the Insurance Ratios to justify that Premium Increase by a whooping 200%.
3. You are definitely aware of the fact that even at the current N5,000 MTP Premium, many Nigerians still patronize the Fake Underwriters and this is not because these Nigerians cannot afford the N5,000 but because they don’t see any benefit be it under your Genuine or the Fake Cover.
4. To rely on the overbeaten lateral- thinking comparison of what they pay as premium in other parts of the world, as your basis to increase the Premium burden on Nigerians will be tantamount to daylight robbery on the Nigerian Insurance Consumers by an Agency established to protect them without a corresponding comparison of the non-pecuniary benefits that accrue to the Policyholders and the Public at large in such Insurance Climes.
5) How much has your Commission paid out to Victims of Hit and Run Vehicles and Customers of Proscribed Insurance Companies over the past 20 years as required under Sec. 78 of the Insurance Act 2003 to justify this astronomical increase in premium amount?
6) Where is the Report of an Ad-hoc Committee required to be set up under Sec. 52 of the Insurance Act 2003 stating the imperative of increasing Insurance Premium by whooping 200%. We also know that the referred Sec. 52 of that Insurance Law does not confer arbitrary powers on you because Insurance is a business affected by Public Policy and otherwise it becomes Legalized Robbery.
7. To what extent have the interests of the Policyholders of the Insurance Underwriters whose Licenses you revoked in the past one (1) year been protected and how much have you paid to the various Fire Brigades in Nigeria as Fire Service Maintenance Fund as prescribed under Sec. 65 of the Insurance Act 2003 but still, you are quick to increase the Premium burden on the largely dissatisfied Insurance Customers in Nigeria.
“Did this gang of organized criminals realize that the minimum wage in Nigeria is 30k?”
“The Insurance Sector in Nigeria is the most dangerous and dishonest arm of the government or the private sector. What will be the end benefit of a private vehicle paying N15k. The rubber stamp national assembly should wake up from its slumber and rewrite this social evil”
“Was this increase brought to the notice of the Law makers and President of the Federal
Republic of Nigeria before enacting it? Law makers, where are you? Oga, President Mohammed, where are you?”
“What for? You want to impoverish the masses completely before you depart, President Buhari may need to resign before his tenure ends’
As you can see for yourself, your Policy Directive has escalated the tensed Security situation in the Country and projected Insurance as an enemy of the people. Even Socio-Cultural Groups (like Afenifere) have joined the bandwagon of Stakeholders who condemn this ill-timed Directive of yours.
ON SOBER REFLECTION
1. The predictable outcome of this Directive of yours will be substantial increase in the number of Fake Insurance Underwriters in Nigeria, more money to the pockets of your Commission and the Insurance Operators and more hardship to the Nigerian Insurance Consumers.
2. The decision of a Regulator, established to protect the interest of the Consumers, to roll out its Circular a day to Public holidays and insisting on Consumer compliance by the last day of the same holidays, clearly shows that your Directive was in “Utmost Bad Faith” and that the Proximate Cause of the inability of Insurance to occupy its position of Strategic Importance in the economy of Nigeria for over a Century (since 1918) of its existence, is the Insurance Regulator.
3. To decide to increase the income to the Underwriters and the Regulators without due
consideration for the feelings of the Consumers, particularly in Nigeria, where the good Customers who don’t make Claims are never otherwise rewarded, will put you on record as the Regulator with the highest level of Impunity and Insensitivity in Nigeria if you failed to reverse yourself and got away with this obnoxious Directive.
CONCLUSION
1. Based on the above facts, we hereby conclude that your Policy Directive on TPM Premium Increase was not subjected to Civilized Trade Practices, Professionally-Accepted Insurance Principles, Transparent Customer- oriented Regulations and Humane Attention to the Economie Situation of most Nigerians at the moment before you hurriedly passed same.
2. The Nigeria Insurance Consumers are further convinced that the motive behind your Directive is self-serving, arrogant and detrimental to their interest which you are established to protect and therefore demand that you reverse same pending proper consideration of the grey areas of the Directive.
