The National Insurance Commission (NAICOM) has been urged to revoke its order regarding the rise in third-party motor insurance premiums in Nigeria by the Insurance Consumers Association of Nigeria (INSCAN). This is stated in a letter that was provided to newsmen on Sunday in Ibadan and is signed by its National Coordinator, Chief Yemi Soladoye.
The third party motor insurance premium in Nigeria will increase by 200%, according to a recent policy directive from NAICOM. The INSCAN demanded that the directive be reversed because it constituted a willful violation of the fundamental concept of absolute good faith and other moral regulatory norms that govern the profession of insurance.
“We hereby write in reference to your Circular No.: NAICOM /DPR/CIR.46/2022 dated December 22, 2022, which increased the third party motor insurance premium in Nigeria by 200–400% for different categories of motor vehicles. And by implication, giving only one week notice to the insuring public in Nigeria to comply.
“We demand the reversal of the directive as it amounts to deliberate breach of the Fundamental Principle of Utmost Good Faith and other decent regulatory principles that guide insurance practice,” it said.
It claimed that NAICOM’s dependence on using the premiums paid in other areas of the world as a benchmark for the burden of premium increases on Nigerians amounted to open-air robbery of customers.
“Though, you threatened to sanction your insurance operators that fail to comply with your directive come Jan. 1, yet, the truth is that operators and NAICOM will benefit from the windfall accrued from the directive. The insurance consumers are, in the real sense of it, the ones being sanctioned,” it said.
The INSCAN recalled that enough time was given to the public for feedbacks and adjustments to be made on the recent cases of currency redesign as well as cash withdrawal limit introduced by the CBN.
It said the almost 20 million Motor Insurance Consumers in Nigeria deserved more than a week notice for compliance, describing the duration as a great insult to the collective intelligence of Nigerians.
The Association said it had read over 500 public comments by Nigerians on the directive, saying the reputation slowly built for the Nigeria insurance industry was being eroded by the series of consumer condemnations of the directive.