The Insurance Consumers Association of Nigeria (INSCAN) has called on the National Insurance Commission (NAICOM) to reverse its directive on increasing third-party motor insurance premiums in Nigeria.
This is contained in a letter signed by its national coordinator, Yemi Soladoye, on Sunday in Ibadan.
The association demanded the reversal of the directive, saying it amounted to a deliberate breach of the fundamental principle of utmost good faith and other decent regulatory principles guiding insurance practice.
“We demand the reversal of the directive as it amounts to a deliberate breach of the Fundamental Principle of Utmost Good Faith and other decent regulatory principles that guide insurance practice,” it said.
The association said NAICOM failed to understand the full implications of its directive, saying those at the receiving end were insurance consumers who provided the accrued income to the entire insurance industry.
INSCAN stressed that enough time was given to the public for feedback and adjustments to be made on the recent cases of currency redesign and cash withdrawal limit introduced by the CBN.
It said the almost 20 million motor insurance consumers in Nigeria deserved more than a week’s notice for compliance.
“How much has your commission paid out to victims and customers of proscribed insurance companies over the past 20 years as required under section 78 of the Insurance Act 2003 to justify the astronomical increase in premium amount? Where is the report of an ad hoc committee required to be set up under section 52 of the Insurance Act 2003, stating the imperative of increasing Insurance Premium by a whopping 200 per cent 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 legalised robbery,” INSCAN said.
The association added that the directive’s predictable outcome would be a substantial increase in the number of fake insurance underwriters in Nigeria.
It further explained that the directive would garner more money to the pockets of NAICOM and insurance operators, forcing more Nigerians into hardship.
“To what extent have the interests of the policyholders of the insurance underwriters, whose licences you revoked in the past year, been protected? How much have you paid to the various fire brigades in Nigeria as Fire Service Maintenance Fund as prescribed under section 65 of the Insurance Act 2003? But still, you are quick to increase the Premium burden on the largely dissatisfied Insurance Customers in Nigeria,” it said.
The association said failure to reverse the hike would put NAICOM on record as the regulator with the highest level of impunity and insensitivity in Nigeria.
It stated that NAICOM’s policy directive was not subjected to civilised trade practices, professionally-accepted insurance principles, transparent customer-oriented regulations and humane attention to the economic situation of most Nigerians.
INSCAN, an affiliate of the Federal Competition and Consumers Protection Commission of Nigeria (FCCPC), was established in 2010.