NAICOM Tasks Insurers On Prompt Claim Settlement
Mr. Olorundare Sunday Thomas, Commissioner for Insurance/CEO, NAICOM
The National Insurance Commission (NAICOM) has again called on insurance operators in Nigeria to ensure timely claim settlement in order to build trust in the industry, noting that non-settlement of claims have negatively impacted the industry.
The Commission made the call at the just concluded two days retreat organised for insurance journalists in Uyo, Akwa Ibom State, with the theme “Improving Stakeholders Perception 2023 and Beyond.”
Speaking to journalists at the opening dinner, the Commissioner for Insurance/Chief Executive Officer of NAICOM, Mr. Olorundare Sunday Thomas, enjoined insurers to take claim settlement seriously, adding that they are in the business of insurance to pay claims.
He said the Commission will name and shame any insurance underwriter who fails to pay claims to its policyholders.
In her paper titled, “Re-Awakening the Nigerian Insurance Industry through Claims Settlement,” Assistant Director, Complaint Bureau Life, Mrs. Agustina Onojake, noted the effect of non-settlement of claims on the industry.
According to her, Lack of trust and confidence in the Nigerian insurance industry resulting from non-settlement of claims constitutes one of the biggest challenges of the industry.
She said “Non-settlement of claims have negatively impacted confidence in the industry. Thus, insurance companies should endeavor to settle claims promptly because Claims payment in insurance contract serves as spice that attracts potential policyholders to insurance patronage.
“Ideally, a prudent claims settlement promotes customer contentment and allegiance. In other words, claims settlement is the activity of insurance companies that truly portrays what they are there for, because claims settlement is the reason for insurance contract.”
Mrs. Onojake explained that “Section 70 (1) (a) of Insurance Act 2003, requires the insurance companies to settle all admitted claims within a maximum time frame of 90 days, and where claims are repudiated, the insured should be communicated by the insurer within 90 days from the date the claims are delivered to the insurer in line with Section 70 (1) (c) of the Act. If the insurance company needs to investigate the claim, it should do that within 90 days.”
She said “Despite the provisions of the Extant Laws, claims settlement has remained a mirage by some insurance companies. Experience has shown that some insurance companies were unable to settle claims due to weak Capital Base, Insolvency, Poor Underwriting, etc.
Mrs. Onojake listed what should be done in order to re-awaken the Nigerian insurance industry through claims settlement including the increase of the insurer Capital Base, noting that “The liquidity position of some of the underwriters is very bad. The capital increase will assist the company to meet their obligations thereby re-awakening the Nigerian insurance industry.”
Creating awareness on claims notification and documentation, she said is another factor that must be taken into consideration adding that “Most of the policyholders lack awareness on claims notification and documentation. There is a need to create awareness on this because it will enable the claimants to provide adequate documents needed for their claims for prompt settlement. This will aid prompt claims settlement and in turn re-awaken the Nigerian Insurance Industry.”
