The Nigerian Insurance Consumers Association has called on the National Insurance Commission to revoke its directive on raising the premium for third-party motor insurance in Nigeria.
This is contained in a letter signed by its National Coordinator, Chief Yemi Soladoye, and made available to journalists on Sunday in Ibadan.
The Nigerian News Agency reports that NAICOM had recently issued a policy directive on increasing the premium for third-party motor insurance in Nigeria by 200 per cent.
INSCAN demanded the revocation of the directive, saying it amounted to a willful violation of the Fundamental Principle of Good Faith and other decent regulatory principles that guide insurance practice.
“We hereby write in regards to your Circular No.: NAICOM /DPR/CIR.46/2022 dated December 22, 2022, increasing the third party auto insurance premium in Nigeria by 200-400 percent for different motor vehicle categories.
“And by implication, give only a week’s notice to the Nigerian insurance public to comply.
“We demand the repeal of the directive, as it amounts to a willful violation of the Fundamental Principle of Good Faith and other decent regulatory principles that guide insurance practice,” he said.
The association said NAICOM did not understand the full implications of its directive, saying the recipients were insurance consumers who provided the accumulated revenue to the entire insurance industry.
He said NAICOM’s reliance on comparing what was paid as a premium in other parts of the world as a basis for charging the premium increase for Nigerians amounted to daylight robbery for consumers.
“Although he threatened to penalize his insurance carriers who fail to comply with his directive on January 1, the truth is that the carriers and NAICOM will benefit from the windfall accrued by the directive.
“Insurance consumers are, in the real sense, the ones being penalized,” he said.
INSCAN noted that sufficient time was given to the public for comments and adjustments on the recent cases of currency redesign, as well as the cash withdrawal limit introduced by the CBN.
He said the nearly 20 million motor insurance consumers in Nigeria deserved more than a week’s notice for compliance, describing the length as a gross insult to the collective intelligence of Nigerians.
The association said it had read more than 500 public comments from Nigerians on the directive, saying the slowly built reputation of Nigeria’s insurance industry was being eroded by the series of convictions.
He said that practitioners, as well as various arms of Nigeria’s central government, were being belittled, cursed and vilified.
“How much have you paid your commission to the victims and clients of the Proscribed Insurance Companies in the last 20 years as required by Sec. 78 of the Insurance Act of 2003 to justify an astronomical increase in the amount of the Premium?
“Where is the report of an ad hoc committee required to be established under Sec. 52 of the Insurance Act of 2003, which makes it mandatory to increase the insurance premium by 200 percent?
“We also know that the aforementioned Sec. 52 of that Insurance Law does not confer arbitrary powers because Insurance is a business affected by Public Policy and otherwise it becomes legalized theft,” he said.
The association said the predictable result of the directive would be a substantial increase in the number of fake insurance underwriters in Nigeria.
“He is definitely aware of the fact that even with the current premium of N5,000 MTP, many Nigerians still patronize fake subscribers.
“And this is not because these Nigerians cannot afford the N5,000, but because they see no benefit, either under their genuine or bogus cover,” the association said.
He said the directive would put more money into the pockets of NAICOM, insurance operators and more hardship for Nigerian insurance consumers.
“To what extent have the interests of the Insured of the Insurers, whose licenses were revoked in the last year, been protected?
“How much have you paid to the various Fire Brigades in Nigeria as the Fire Service Maintenance Fund as prescribed in Sec 65 of the Insurance Act 2003?
“But still, the premium burden on largely dissatisfied insurance customers in Nigeria is rapidly increasing,” he said.
INSCAN regretted the increase without due consideration of consumer sentiment, particularly in Nigeria where good customers who did not make complaints are never rewarded.
The association said that if the hateful directive is not reversed, NAICOM would go on record as the regulator with the highest level of impunity and insensitivity in Nigeria.
He claimed that NAICOM’s policy directive was not bound by civilized business practices, professionally accepted insurance principles, transparent customer-oriented regulations, and humane attention to the economic situation of the majority of Nigerians.
The association said consumers were even more convinced that the motive behind the directive was selfish, arrogant and detrimental to their interests.
He said NAICOM was established to protect consumers, demanding the reversal of the policy pending proper consideration of the gray areas of the directive.
NAN reports that INSCAN, an affiliate of the Nigerian Federal Competition and Consumer Protection Commission, was established in 2010.
It was established to speak for aggrieved Nigerians on insurance and promote the adoption of insurance mechanisms in Nigeria, among others.