Revised Third Party Motor Insurance Rates: State Internal Revenue Commission Pledges Support To NAICOM
As the National Insurance Commission (NAICOM) intensifies efforts to ensure implementation of the directive on the revised Third Party Motor Insurance Premium rates in the country, some state internal revenue commissions have pledged their support to the Commission to ensure compliance to the new directive.
Findings revealed that some of them have already written to the Commission pledging their support and even promised to report to the commission any insurance company operating within their jurisdiction that fails to comply with the directive.
What this means is that any insurance company that sells Third Party Motor insurance policy below the new rate in that state would be reported to NAICOM.
It should be noted that on December 22, 2022, the National Insurance Commission (NAICOM) issued a circular calling for upward review of Third Party Motor Insurance premium.
According to the circular, “Pursuant to its function of approving premium rate of insurance companies under Section 7 of NAICOM Act 1997, and other extant laws, the Commission hereby issues this circular on the new motor insurance premium rate effective from January 1, 2023.”
The circular was signed by NAICOM’s Director, Policy and Regulation, Mr. Leo Akah.
The circular stated that for any third-party property damage (TPPD), the limit of claims an insured can enjoy on a policy for the private vehicle will now be N3 million for the new premium of N15,000, adding that in the same vein, the limit for own goods would be N5 million, with a new premium of N20,000.
The Third party insurance policy is inclusive of Ecowas Brown Card (EBC), according to the circular.
The commission added that the Insurance premium rate payable on staff buses is now N20,000 and its TPPD would be N3 million.
“Similarly, commercial vehicles, trucks and general cartage now have a TPPD limit of N5 million with an N100,000 premium rate while ‘special types’ now have a TPPD limit of N3 million and a premium of N20,000,” the circular added.
For Tricycles, the TPPD limit is now N2 million with a premium of N5000 while motorcycles now have a TPPD limit of N1 million and a premium of N3000.
It added that commercial trucks and general cartage will pay N100,000 premium for N5 million TPPD limit; tricycles to pay N5,000 for N2 million TPPD limit, and motorcycles to pay N3,000 for N1 million TPPD limit, “special types’’ of vehicles will pay N20,000 premium while the TPPD limit has been raised to N3 million.
The circular also noted, “For a comprehensive motor insurance policy, the premium rate shall not be less than five per cent of the sum insured after all rebates and discounts.”
Meanwhile, approval has been given to insurance operators to collaborate with the states to ensure full implementation of and compliance with the directive for the benefit of the policyholders and the growth of the industry.
This was disclosed recently by a member of the Communications and Publicity Sub-Committee of the Insurers Committee who is also a Director at NAICOM, Mr. Rasaaq Salami.
According to him, one of the recommendations by the Market Development sub-committee of Insurers Committee was the need for Insurance Sector to collaborate with the states, to go beyond the national to the states.
He said the recommendation was adopted at the recently held Insurers Committee meeting, adding that with the latest development, Insurance companies will be reaching out to the states for collaboration.
