The Commissioner for Insurance, Alhaji Kari Muhammad, has said that the industry regulator will reprimand disobedient companies over non settlement of outstanding claims to policy holders, as it will not mull over a shift from the September 30, time limit.
Muhammad insisted that National Insurance Commission (NAICOM) would enforce the deadline on effective claims management.
According to him, other reasons for implementing such deadline and sanctions are effective trade practices and fair treatment of policy holders and intending consumers.
Muhammad said for Nigeria’s insurance industry to be relevant, the prescribed standard of practice set by the commission should be implemented.
He said the claims Management Guidelines document requires each insurer to develop, document and implement claims management and payment policies as he expressed dissatisfaction with large numbers of unpaid claims by insurance firms, including those with robust capital bases.
Muhammad said if the situation was allowed to continue, the growth of the industry would be stalled, noting that the current industry level was still below 35 per cent.
“Also, policy buyers and intending ones will easily lose confidence in the sector as it deepens the poor image of insurance practice in Nigeria,’’ he said.
Muhammad said NAICOM was determined to check bad practices in the industry through effective claims management and ensure adherence to global standards.
He commended his predecessor in office, Mr Fola Daniel, for designing policies that encouraged growth in the industry.“Before 2007, the industry capitalisation was just N98 billion with 11 per cent growth rate,’’ adding that the former management settled complaints worth N4.2 billion.
NAICOM had in a circular on July 6 given insurance firms up to Sept. 30 to clear all outstanding claims of customers or be sanctioned. The commission said from Oct. 1 it would invoke the law and punish defaulting firms.