Consumer Protection: Two Insurance companies closed by Central Bank of Gambia

Following the closure of two insurance companies namely; International Insurance Company Limited and London Gate Insurance Company by the Central Bank of The Gambia, the Daily Observer sat down with Henry Jawo, the Secretary General of the Insurance Association of The Gambia (IAG) to shed light on the issue.

He informed our reporter that insurance services in The Gambia are regulated by the Central Bank under the Insurance Act 2003 and Regulations 2005.

This regulation, he said, requires that an insurance company needs to deposit an amount of 15 million Dalasi as paid up capital to operate as an Insurer.

“Companies are also required to maintain a particular margin of solvency of which their admissible assets should be more than their liabilities (general business) or in the case of life assurance; the liabilities on their policies shall not exceed the amount of the life fund.”

According to him, the regulators (The Central Bank) are never happy to close a company but these extreme measures are taken for the general interest and that is to protect insurance consumers and maintain market confidence in the industry,” he said.

He acknowledged that the Insurance Association of The Gambia equally regrets the closure of these members and as an industry they will do everything possible to avoid recurrence.

“Therefore, the IAG has forwarded reform proposals for the industry to the Central Bank to enable them play their role in National Development and the financial sector in particular,” he further explained.

One of the proposals, according to him, is the implementation of the ‘No Premium, No Cover’ provision in the Insurance Act’ on which the Central Bank has recently issued guidelines effective 1st January 2016.

IAG Secretary General indicated that the industry was providing insurance on credit and most of these debts have never been paid thus leading to some companys’ failure to meet solvency requirements.

He went on to add that in insuring the public needs to understand that Insurance is a necessary tool for national development. “The industry is thus appealing to the general public for their cooperation and understanding in these reforms,” he noted.