New Premium For 3rd Party Motor Insurance Commences Sept 2022

L-R: Samuel Oghenebrume Ogbodu, Managing Director, Sunu Assurances Nigeria; Akinjide Orimolade, Managing Director, Stanbic IBTC Insurance; Olusegun Omosehing, Managing Director, Old Mutual Insurance Plc, Nigeria; Ademola Abidogun, Managing Director, Guinea Insurance PLC and Benedict Ugochukwu Ujoatuonu, Managing Director, Universal Insurance PLC all members of the Committee at the press briefing in Lagos yesterday

The National Insurance Commission (NAICOM) said the new premium for Third Party Motor Insurance for adoption by operators will take effect from September 2022.

This was announced by the Vice Chairman, Sub-Committee, Publicity and Communication, Insurers Committee, Mr. Segun Omosehin to journalists at a media briefing after the Committee’s meeting in Lagos yesterday.

The new rate which will be an upward review of the current N5,000 premium paid by motorists is the outcome of deliberation between the committee which consists of the Commission and chief executive officers of underwriting firms.

“ECOWAS Brown Card and Third Party Motor Insurance issue have been in the burner for a while and regulator has adopted in principle the implementation of the ECOWAS Brown Card and Third Party Motor Insurance Regime in Nigeria.

“What is left to be finalized is the applicable premium that will be charged and that we are working on because we want to take everything into consideration before coming to the final decision on the pricing. So we are hopeful that this will be concluded on or before the ending of this month September,” Omosehin said.

Third-party motor insurance is one of the compulsory classes of insurance and the most popular among the six compulsory insurance policies stipulated by the Insurance Act 2003.

Mr. Omosehin said the issue of the revised guidelines on Bancassurance was also discussed at the meeting.

“We received some cheery news that regulator is likely to release some new guidelines on Bancassurance.  Some elements in the guidelines are being reviewed and so we are hopeful and looking forward to some revised role on the operations of Bancassurance.

“The operators had, prior to now made some inputs that they will love to see in the guidelines. So we are hoping that some of those things perhaps would have been taken into cognizance in the new one. So we are waiting for it earnestly” he said.

The guidelines, according to him, were reviewed based on the issues raised in the market.

On the Environmental Sustainability Governance (ESG), Omosehin said the initiative is a practice that Nigeria as a country is adopting.

ESG, he said, “is something around environment Sustainability and governance are global issues that are taken prominence and you know that for most international companies ESG or sustainability report is an integral part of annual reporting for institutions that are quoted in most exchanges market outside Nigeria. It is a practice that Nigeria as a country is adopting.”

“Aside from being something that is globally compliant, it gives the advantage of having businesses run sustainably which ultimately will benefit the operators in that segment.

On Risk-Based Supervision he said, “based on the conversation with the regulator, technically we have commenced Risk-Based Supervision and pilot have commenced on about eight companies to enable regulator to take the final decision on adoption of the model across the entire market.”

On NAICOM Portal, the MD/CEO, Old Mutual Insurance, said this Commission is using this to encourage operators in the market to update, and upscale their technology to a level that they can have real-time online synergy with the NAICOM portal.

“Companies are encouraged to build an Application programming interface (API) that they can connect NAICOM  API so that information would be seamless and that will help in the building of the database for the insurance market.

On annuity, he said NAICOM is looking at how the operators in the market can participate more in the segment because not all underwriters in this market are in that segment.

Speaking on Claim Settlement, Omosehin said that the Commission encouraged every operator in the market to see how they prioritize claim settlement and also how we should always look for reasons to settle claims even where there are reasons not to.

On International Financial Reporting Standard (IFRS 17) which is to commence in January 2023, Omosehin said the regulator encouraged underwriters to work toward its adoption.

On African Continental Free Trade Agreement (AfCFTA): he said the Committee set up to work with the headquarters of the African Continental Free Trade Agreement (AfCFTA), has submitted a preliminary report as to how the progress in terms of compliant of the insurance sector to the effect that the industry can take full advantage of the benefit that will come from AfCFTA.