Collaboration key to effective enforcement of compulsory insurances

Partnerships with states have been identified as critical to the implementation and effective enforcement of the different compulsory insurances.

According to analysts, the states are critical stakeholders in driving enforcement at the state levels across the country.

The National Insurance Commission (NAICOM) said recently that its ability to court the states into partnering with the insurance industry to promote the compulsory insurance scheme is critical to the success of the scheme.

Sunday Thomas, acting commissioner for insurance/ CEO of NAICOM said the commission is engaging Nigeria’s ‘Governor’s Forum’ to partner with the insurance industry  in enforcement of the compulsory scheme.

Thomas said that through the forum, the governors can be made to see the benefits of the partnership for their citizens.

“Beyond the benefits of protecting the citizens against third party risks, it will be a source of employment for the partner states, and source of internally generated revenue, Thomas said.

In 2009, the Commission launched the Market Development and Restructuring Initiative (MDRI) project aimed at a comprehensive pursuit of development of the industry as well as ensuring full compliance with extant Laws in respect of compulsory insurances.

The first phase of the project according to NAICOM was successfully carried out in all the six geo-political zones in the country.

Thomas said that the second phase of the MDRI project will soon be unveiled and it will mark out clear targets and tasks for all stakeholders in the industry.

“The Commission is committed to vigorously pursue the continued implementation of Compulsory Insurances to which collaboration and supports from all stakeholders are key towards achieving the desired goal.

The compulsory insurance includes Motor Third party Insurance of section 68 of the Insurance Act 2003; Buildings under construction of section 64 of the Insurance Act 2003; Occupiers liability insurance of section 65 of the Insurance Act 2003; Group life Insurance in line with the Pension Reform Act 2004 and Health Care Professional Indemnity Insurance-under section 45 of the NHIS Act 1999.

But as beautiful as these initiatives, not much success has been achieved in terms of implementation and enforcement of the laws, so have yet to impact on the industry revenue generation.

Efforts of the commission to embark on enforcement have also not yielded much fruit as a result of lack of human and material capacity to drive the process.

The security agencies including the police and the road safety corps that should complement the industry to ensure enforcements have also not been efficient having compromised in many instances, and this has further worsened the enforcement process.

Across the country are ongoing constructions works on public buildings, which require building liability insurance or building construction insurances against third party liability, meaning that owners or promoters of such projects or properties have committed certain offences punishable by law, and therefore needs to be prosecuted.

For instance, Section 64(1) of the 2003 Insurance Act states that “No person shall cause to be constructed any building of more than two floors without insuring with a registered insurer, his liability in respect of construction risks caused by his negligence or the negligence of his servants, agents or consultants, which may result in bodily injury or loss of life to or damage to property of any workman on the site or of any member of the public.

According to the law, the duty to insure under subsection (1) of this section shall arise when a building is under construction.

Subsection three states that a person who contravenes subsection (1) of this section commits an offence and on conviction shall be liable to a fine of N250, 000 or imprisonment for three years or both.

While session 65 states that every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood. “Public building”, in this section includes a tenement house, hostel, a building occupied by a tenant, lodger or licensee and any building to which members of the public have ingress and aggress for the purpose of obtaining educational or medical service, or for the purpose of recreation or transaction of business.

The insurance policy under subsection (1) shall cover the legal liabilities of an owner or occupier of premises in respect of loss of or damage to property or bodily injury or death suffered by any user of the premises and third parties.

An occupier or owner of premises who is in default of this section commits an offence and is liable on conviction to a fine of not more than N100,000 or to imprisonment for one year or both.

Business Day

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