A breather is coming for insurance companies on the tariff for compulsory third party motor insurance beginning January 2022, the policy has been a drain on insurers accepting too little premium for a stream of claims that far outweigh the risk price, and this compelled the operators and the National Insurance Commission to take a position to raise the tariff bar.
Back in July the Insurers Committee at the first meeting after a break, set to change the dynamics of third party motor insurance by setting up a committee that will overhaul the price of the policy.
Based on the work already done, Mrs Ebele Nwachukwu, who doubles as vice chairman Nigerian Insurers Association and chairman of sub committee on communication and publicity said the Insurers Committee comprising NAICOM and all the arms of the industry, gave a snapshot after yesterday’ meeting of what to expect. The Committee has concluded the take-off date for the new tariff to be announced by the Commission at which point the current N5000.00 tariff will become a stable in the underwriting archives.
“By January 2022 , the regulator should be able to announce a scientific new price for the third party insurance policy that will also include the ECOWAS Brown Card,” she cleared.
At that first meeting of the Insurers Committee, Nwachukwu said it was necessary at due interval to revisit the compulsory third party motor policy with the set of the insurers technical committee and actuaries to put the policy in good underwriting balance.
Annuity also was mentioned at the media briefing where she said the Commission has asked insurance companies to update it on the annuity business and thereby make it clear for regulatory intervention when necessary and also advance a clear course to help insurance companies involved.
On IFRS 17 she said the Commission has been combative and engaging all arms of the industry to make the implementation from the effective date with all operators on the starting block.
Very good and economically sensible approach to Third Party Insurance policies. In most cases claims arising out of this type of cover take quite along time to settle. On personal observation some cover notes held by drivers on third party basis are from non existent insurance companies. This is another area where insurers in cooperation with Naicom and various licencing offices should look into and block the loophole. It is a sad fact that most holders of TP insurance covers do not know which Insurers are still in operation or have ceased carrying out insurance business.
Chief you got it on the hip. Thanks indeed. Its laced with professional thickness, apt and germane.