Nigerians May Pay More for Third Party Insurance from January

Agency Report/

The Insurers Committee on Friday said plans were being concluded to enable the National Insurance Commission, announce a new price for third party motor Insurance policy by January 1, 2022.

The Chairman of its Sub-Committee on Publicity and Communication, Ebelechukwu Nwachukwu, said this at a media briefing on the outcome of the Insurers Committee meeting held in Lagos.

The News Agency of Nigeria reports that the current price for the third party motor insurance is N5,000.

Nwachukwu, also Managing Director, NSIA Insurance Limited, said the committee working on the review on the part of Nigeria Insurers Association would conclude and submit its report to the regulator by November.

She said: “By January 1, 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.”

According to her, the committee had an interaction with representatives from ECOWAS on how to process and issue the ECOWAS brown card with a motor insurance and how it will work in the Nigerian market.

Nwachukwu said that NAICOM, during the meeting, also highlighted some key buckets of risks that it would be using to measure insurance firms when it visits for the Risk Based Supervision.

She listed the risks as: Credit risk, Liquidity risk, Market risk, Insurance risk, Operational risk, Legal regulatory risk, Compliance risk and Strategic risk.

She added: “NAICOM did a test run of the RBS in five insurance companies, and following the outcome of the assessment from the firms, the regulator came up with highlights of the risks.

“Highlighting the risk is good for the underwriters so that we can go back in-house to ensure that our reports are standard when it comes to reporting RBS to the regulator.”

On the NAICOM portal, Nwachukwu hinted that the portal had been working effectively since it was launched last month.

She said it was making the work of insurers easier because their operations were now being monitored live online by the regulator.

Nwachukwu said the underwriters would keep interacting with the regulator on how to improve on its operations.

According to her, many insurance companies were not yet complying 100 per cent as the transactions are going live because some still bundle their transactions to report later.

On the International Financial Reporting Standard 17 expected to kick-start by January 1, 2023 for financial institutions, Nwachukwu said the regulator and operators were working closely on the implementation.

She said: “NAICOM has been having discussions with lots of insurance companies on the implementation of IFRS-17, mostly on the part of the NIA.

“A working group of policy and methodology was created to come up with a guidance note on the implementation.”

NAN reports that Insurers Committee, like the Bankers Committee, comprises NAICOM and Chief Executive Officers of Insurance companies in Nigeria.

The committee, inaugurated on November 19, 2015 by the then Minister of Finance, Kemi Adeosun, operates under a mandate to activate the insurance industry change agenda and strategically reposition the sector.

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