Healthy Competition: How NAICOM can monitor Insurance firms

The Deputy Commissioner, Technical, National Insurance Commission, Mr. Sunday Thomas, has said the commission will monitor the issue of competition among operators in the insurance sector.

He said this during a seminar on insurance in Benin while commenting on the recent circular on insurance ratings released by the commission to the operators.

“We have released the ratings to guide the market and I believe this is going to control the issue of competition within the market; we are going to watch as events unfold. This is the starting point for managing competition in the sector,” he said.

While speaking on the group life insurances done by different ministries and organisations, he said it would eliminate blind covers in which insurance policies were given without accurate data on the number of workers covered.

Thomas observed that different firms were charging different rates, but this would no longer be tolerated.

According to him, price being used as a vehicle of competition does not sit well with the commission and insists on service as the basis for competition.

He said that the penalties for violation of the ratings had been enshrined in the insurance laws.

He said, “To eliminate blind covers, you must have the names and information of the workers you are insuring. We have issued appropriate circulars and if they go against them, the consequences are there.”

The commission said, in a recent circular that, “All insurance operators are directed to henceforth comply with the existing approved premium rates for all compulsory classes of insurance.”

In the circular, the commission gave the premiums to be charged on builders’ liability insurance, occupiers liability (public building) insurance and healthcare professional indemnity insurance.

It also specified the rates to be paid on assets owned by the federal, states and local governments, as well as individual and private organisations.

“The commission will strictly monitor compliance,” the circular stated.

As part of efforts to reach the uninsured, he said the commission decided to release microinsurance guidelines, which were a total departure from the previous one that was released.

He said there were several applications for microinsurance licence that were being processed.

While noting that there were ample opportunities to deepen the market, he said the commission would be focusing on insurance penetration this year.

 

Source: Punch