The Nigerian Insurers Association (NIA) has supported the increase in the third-party motor insurance as the gains would propel quantum leap in premium income of insurers and enhance claims settlement to policyholders.
Besides, the ECOWAS Risk (risks arising from travelers within the West African Countries is also covered under the premium rates, as well as strengthen regional integration.
The NIA Chairman who is also the Managing Director/Chief Executive Officer, Old Mutual Limited, Segun Omosehin, said during a media parley with members of the Nigerian Association of Insurance and Pension Editors (NAIPE) in Lagos.
He said the Association is mobilising members to ensure all members support the effort of the regulator for the success of the initiative and the growth of the industry.
According to him, the Association is in full support of the new premium rates released by NAICOM and has indeed taken steps to ensure that members comply and join in the publicity initiatives that will follow.
He said “the Association is embarking on stakeholders engagement as a first layer interface with the critical stakeholders to ensure their support.
“We do not need to restate the issues with enforcement of the old rates, but we are confident that with your usual support and the understanding of the Nigerian public, Nigerians will support the new rates and this will not only lead to increase in premium income for underwriters but also increase in claims payment to the clients.
“It is important at this juncture to point out that ECOWAS Risk (risk arising from travelers from West African countries) is covered under the new premium rates and it is going to strengthen regional integration remarkably.”
It would be recalled that on December 22, 2022, NAICOM issued a circular titled: “New Premium Rate for Motor Insurance” with reference: NAICOM/DPR/CIR/46/2022, signed by Leo Akah, Director, Policy and Regulation, NAICOM, for Commissioner for Insurance, Olorundare Sunday Thomas, and sent to all insurance Institutions.
The circular approved a review in the private third party motor insurance policy premium from N5,000 to N15,000 with effect from January 1, 2023.
Also approved in the circular was N3 million Third Party Property Damage (TPPD) limit for private motor; N5 million limit for own goods, with premium of N20,000; staff bus premium, N20,000 and TPPD, N3 million.
Besides, commercial vehicles, trucks/general cartage has TPPD limit of N5 million with a premium N100,000; special types, TPPD limit of N3 million, premium of N20,000; tricycle, TPPD limit N2 million, premium N5000 and motorcycle, TPPD limit N1 million; premium N3000.
The circular also stated that comprehensive motor insurance policy premium rate shall not be less than five per cent of the sum insured after all rebates/discounts.