The Nation Newspaper

Category: Insurance

  • ‘Why insurance firms do not settle claims promptly’

    The Commissioner, National Insurance Commission, (NAICOM) Mr Fola Daniel, has said one of the reasons insurance firms are unable to settle claims promptly is the delay or non-payment of insurance premium by the insured.

    He stated this at a sensitisation workshop on the implementation of the No-Premium-No-Cover rule as contained in the Insurance Act 2003 organised for Insurance Desk officers of Ministries, Departments and Agencies of Federal Government in Abuja.

    He said: “Most insurance companies make huge provisions for outstanding premiums in their books annually, which invariably affects their bottom-line and thus, their ability to settle claims as and at when due to the insured, make profit, pay dividend to shareholders and attract investments to enable growth”.

    He noted that the situation is unhealthy and dangerous to the insurance industry and unless it is halted, it is capable of driving the industry into extinction.

    He added: “It is regrettable that government at all levels is the major culprit in this regard. We have noticed that budgetary provisions for insurance of government assets and properties are either inadequate or in most cases not made at all.

    “Besides, where the provisions are made, payments of premium to insurance companies are either delayed for months or the funds redeployed to meet other needs by ministries, departments and agencies of government which is in clear breach of Section 50 (1) of the Insurance Act 2003.”

    The workshop was meant to appraise the MDAs on the modalities for the implementation and enforcement of the rule in order to avoid gaps in the insurance covers of government assets.

     

  • 19 US states reject new health insurance market

    Nineteen states have turned down the Obama administration’s invitation to run the new health insurance markets that will begin serving millions of uninsured Americans less than a year from now. That puts a huge task on the feds, a defining challenge for President Barack Obama’s second term.

    Friday is decision day for states to notify Washington if they will set up their own insurance exchanges under the federal health care law. Monitoring by The Associated Press finds a divided nation moving ahead, despite the misgivings of some state officials. Half the states now say they will participate in some way.

    Still, drafters of the law did not anticipate that so many states would remain on the sidelines at this late stage. Federal control of the new state markets where individuals, families and small businesses will shop for taxpayer-subsidised private coverage was seen as a failsafe, not the standard for nearly half the country. Critics predict delays.

    All of the states refusing are led by Republicans.

    On the other side of the ledger, 17 states and Washington, D.C., say they want to set up and run their own markets. The administration has already started granting approvals. Eight other states have indicated they want to pursue a partnership with Washington, and more may do so. Only six remain undecided.

    Exchanges are the gateway to the new health care law for individuals and families who buy their own health insurance, as well as for small businesses.

    Currently, it’s hard to tell what’s a good plan or a fair price. You can get turned down if you have a medical problem, charged more if you are older or a woman. The health care law forbids insurers from turning away the sick, limits what they can charge older people and bans gender-based surcharges. It also requires virtually all Americans to get coverage or face fines.

    Exchanges are supposed to make picking health insurance like buying an airline ticket from an online travel site like Orbitz or Expedia.

    There will be a website, and you’ll be able to put in your ZIP code and get a list of available health plans. There will be a section where you can find out if you qualify for subsidies, or for Medicaid. There will be cost calculators to allow you to compare different levels of coverage: platinum, gold, silver and bronze. There will be tools that allow you to see if your doctor or hospital is with a particular plan.

    Middle-class consumers will be able to find out if they are eligible for government help with their premiums for private insurance. Initially, nearly nine of every 10 taking part will get assistance.

    Low-income people can use the exchanges to find out whether they are eligible for expanded Medicaid coverage under the law. In addition to deciding how to implement exchanges, states must also decide whether to accept the Medicaid expansion. There’s no deadline set for that decision, and most are still weighing options.

    Open enrolment for exchange plans starts next October 1, and coverage begins January 1, 2014. Initially about 10 million people are expected to sign up, growing rapidly thereafter. California, New York and Kentucky are among the states that have opted to create their own exchanges. Among those passing are Texas, Georgia and Kansas. Partnership states include Illinois and West Virginia.

    Republican governors rejecting state exchanges have cited a variety of reasons. Some say the administration has not provided enough information. Others say there’s too much federal regulation. Most have concerns about costs. But some Republican leaders have broken ranks, including governors in Idaho, Nevada and New Mexico, and the insurance commissioner in Mississippi.

    In announcing his support for a state exchange this week, Idaho Governor C.L. “Butch” Otter said, “it would be irresponsible of me to simply abandon the field to federal bureaucrats. In the face of uncertainty we must assert our independence and our commitment to self-determination, while fulfilling our responsibility to the rule of law.”

    Indeed, exchanges have a Republican pedigree. The idea was pioneered in Massachusetts under then-Governor Mitt Romney’s health care overhaul.

    “All this is full of irony,” said consultant Jon Kingsdale, who founded the Massachusetts exchange for Romney. “If you had asked many of those (Republican) governors four years ago before this got politicized, it would have been a no-brainer: `We want the states to do it.’”

    The health care law increased the power of the federal government, but states that run their own exchanges retain important roles overseeing insurance plans, addressing consumer issues and coordinating between the new marketplace and their Medicaid plans. That last item may be the most important, since Medicaid is a major component of state budgets.

     

  • Operators urge NAICOM to change tactics

    Operators urge NAICOM to change tactics

    Operators are not excited with the way the National Insurance Commission (NAICOM) is regulating the sector.

    They want the commission to develop what they call practical strategies for taking insurance to greater heights and talk less.

    Though they said operators say the leadership has tried, they believe more could still be done to deepen the penetration of insurance in the country.

    Managing Director, Riskguard-Africa Nigeria Limited, Yemi Soladoye, told The Nation, that it was necessary for the Commission to concentrate on how the industry could move forward.

    He said: “NAICOM having pushed all these reforms and sanctions to the market, in the last three years, should concentrate on how the industry can get quantitative results from all the good things they have done.

    “As they have brought in Market Development and Restructuring Initiative (MDRI), they need insurance education and enlightenment to get the result and should now begin to look at it in quantitative terms. If they would need to help insurers on skill development they should do that. If they would help them even on product development, they should do that. If they need to assist them in providing training, they should do that, for there is huge man power shortage in the agency system. Not many people know how to run agency, so many of them do not have experience, so, if NAICOM is to help them on retail market, it will be okay.

    “If they would help them on payment system, especially mobile payment, they should also do that. So, that at the end of the day, NAICOM would concentrate on things that would bring about huge volume of premium.”

    Meanwhile, the NAICOM has lifted the suspension placed on the Akure-based insurance brokers, Prime Investment Insurance Brokers Limited.

    In a statement NAICOM’s Assistant Director Corporate Affairs, Lucky Fiakpa, said the lifting of the suspension is sequel to the satisfactory conduct of the broker during the period it was sanctioned and that the company has purged itself of the infractions that necessitated its hammer.

    The company was suspended on June 14, 2012 for not handling the Ondo State Government property insurance account properly.

    The Commission, however, advised that the company to “henceforth conduct its business in line with good corporate governance and market practices.”

  • Mansdard, Custodian get ‘B’ rating

    Mansdard, Custodian get ‘B’ rating

    An international rating organisation, A.M. Best, Europe Rating Services Limited, has given B’ rating to Mansard Insurance Plc and Custodian and Allied Insurance Plc.

    They made the list of the agency and were affirmed to have the financial strength rating of ‘B’ (Fair) and issuer credit rating of ‘BB+’, with stable outlooks.

    The ratings of Mansard reflect its “strong risk-adjusted capitalisation, good business profile and strong underwriting performance,” said Best.

    As an offsetting factor Best cited “Mansard’s investment strategy, which has a significant concentration on both land and property under development asset;”adding that it recognises the efforts made by the company to reduce the property exposure.

    The ratings also incorporate Best’s view of the company’s “exposure to the very high political and financial system risks associated with its operation in Nigeria.”

    On Mansard’s risk-adjusted capitalisation, Best noted that it is “strongly supported by a large capital base, and although it is expected to slightly decrease going forward, it will remain supportive of the company’s ratings. Mansard paid dividends of N 900 million ($4.4 million) in 2011 equating to a dividend pay ratio of 96.6 per cent, and in Best’s opinion, this could negatively impact the company’s capitalisation growth.

  • Fraudsters will destroy insurance, says Commissioner

    To win the confidence of people, charlatans and fraudsters must be shown the way out of insurance, the Lagos State Commissioner for Education, Mrs Olayinka Oladunjoye, has said.

    Speaking at this year’s graduation of the Chartered Insurance Institute of Nigeria (CIIN), Mrs Oladunjoye said the world is threatened by environmental risks, terrorism and civil unrest. These, she said, called for greater protection from insurance covers and the need to educating the citizens about insurance.

    She observed that some insurance practitioners were involved in activities that could dent the image of the industry, urging the institute to take steps to stem the ugly trend.

    Mrs Oladunjoye promised to help create the enabling environment for the business to thrive in the state.

    Meanwhile, CIIN has warned school certificate holders that they might be sanctioned if found guilty of unethical practices.

    Its President, Dr Wole Adetimehin, said the institute could withdraw its certificate from any holder, if it discovered any breach of examination.

    He said: “Permit me to reiterate the policy of Council regarding certificates issued by the institute as the institute’s property, which could be withdrawn from the holders if the institute has good reasons to do so.

    “Let me state categorically that the institute reserves the right to withdraw its certificate from any holder, if it discovers any breach of the examination process. A further reason for such withdrawal of certificates may emanate from acts unbecoming of a holder of the institute’s professional qualification.”

    He noted that the institute would strengthen its examination system through regular reviews of the syllabus and examination structure, stressing that it is conscious of the industry post-consolidation challenges, which came with new and complex human capital needs.

    “The challenges facing the industry not only requires a fresh impetus in human capital development, but also a renewed vigour and approach to skills recreation to equip practitioners for the huge tasks of managing the realities in the business landscape,” he said.

    He noted that the attainment of professional qualification should not be seen as an end in itself, but as a means to an end. Therefore, it behooves holders of professional qualifications to be mindful of the efficacy of Continuous Professional Development (CPD).

    “As you are aware, the CPD has become institutionalised with varying degrees of enforcement by most professions. In our own case, it engenders a scheme which requires members to locate themselves in the point scoring index, hence it is referred to by our institute as the Mandatory Continuous Professional Development (MCPD) programme,” he added.

    He said no professional should exempt himself from the scheme under any guise.

  • Flood: Farmers to get lifeline from NAIC

    The Nigerian Agricultural Insurance Corporation (NAIC) has assured farmers whose farmlands were destroyed by the recent flood that they would be compensated.

    In a statement, NAIC’s new Acting Managing Director, Dr Tijani Garuba, called on the staff of the firm to chart a new course to reposition the agency in the face of increasing competition and challenges in the market place.

    He assured NAIC’s clients of improved service delivery.

    While sympathising with the victims of the flood, Garuba advised farmers to take advantage of NAIC’s services to mitigate the floods, drought and crop failures that had become prevalent in the country.

    He also said the Federal Government established NAIC to provide succour and extension services to farmers who insured with the corporation to be paid adequate claims.

  • Late remittance of deductions to attract fine, warns PenCom

    The National Pension Commission (PenCom) has warned employers to submit deductions in respect of pensions’ contributions within two weeks or risk two per cent fine.

    In a statement, it said: ‘’Employers are to remit employees’ contributions not later than seven working days from the day salary is paid.”

    It noted that if default persists after three months, one per cent of the outstanding pension would be paid to the commission.

    PenCom warned that it would sue defaulters if violation persists. It added that employers who refuse to give access to information about their staff would pay a fine of not less than N200,000 and that every false or misleading information would attract N100,000 fine daily.

    It said any employer who forces its employees to open an account with a Pension Fund Administrator (PFA), would pay N1,000 after three months per employee for every month of violation.

    Besides, it was gathered that the commission is seeking powers to enable it to sue employers for refusing to remit pension contributions.

    PenCom called for the amendment of Section 11(7) of the Pension Reform Act (PRA) 2004, saying the provision is faulty.

    It said: “Power to Institute Criminal Proceedings against Employers for Persistent refusal to Remit Pension Contributions: Section 11(7) should be amended to empower the Commission to institute criminal proceedings against employers who persistently fail to deduct and/or remit pension contributions within the stipulated time; review the penalties and sanctions, arguing that the sanctions provided under Section 85 are no longer sufficient deterrents against infractions of the PRA 2004.

    It, therefore, suggested that Section 85 should be amended to provide for stiffer penalties.

    Pencom’sDirector-General, Mohammad Ahmad, said 172 debt recovery agents had been employed to collect unpaid contributions, adding that they have resumed.

    He explained that the agents, who are lawyers and accountants, would ensure that employers comply with laws on remittance of their workers’ contributions.

    He noted that 50 per cent of the penalty from outstanding contributions recovered through the agents would be given to employees with RSA, while the balance would be used to defray the cost of recovery.

    He added that PFAs would not be allowed to charge administration fee on retirement savings’accounts that benefited from the recovery of the arrears.

    He said each agent’s performance would be monitored based on performance.

    He said: “The Commission would hold quarterly meetings with the recovery agents and PFAs to discuss remuneration of recovery agents which would be performance based. The remuneration would be met from the interest penalty charged on the outstanding contributions recovered through the efforts of the agents and administration fees charged by PFAs.

    “In that regard, 50 per cent of the interest penalty would be used to defray the cost of recovery while the balance would be for the benefit of the RSA holder. In addition, PFAs would not be allowed to charge administration fee on RSAs that benefited from the recovery in the arrears or in retrospect.

    “Recovery agents would be required to submit monthly progress report with respect to recoveries from employers assigned to them. The reports would be reviewed to determine if the performance of the agent is satisfactory or otherwise. Challenges encountered and ways forward would also be reviewed. The compliance and enforcement department would be responsible for the implementation of the framework in conjunction with other relevant departments in the commission.

    “The Commission would provide the secretariat and basic resources, such as telephone and Internet access for use of the recovery agents. The secretariat would be located in the Commission’s office. The framework is subject to a periodic review to ensure speedy recovery of un-remitted pension contributions by employers.”

  • ‘Prestige Assurance, Dana Air insincere’

    Five months after the Dana Airline crash which claimed about 200 lives, families of some of the victims have accused the insurer of the ill-fated aircraft, Prestige Assurance, of insensitivity for refusing to pay the claims of their dead beloved ones.

    A lawyer said the law stipulates that within 30 days from crash date, the advance payment of $30,000 should be made to those who are entitled to it.

    Some of the family members, who spoke with The Nation, lamented that they have been subjected to untold hardship since the sudden death of their breadwinners and the failure of Prestige Assurance to pay them. They also lamented that they had submitted all the papers demanded by Dana Air and the insurance firm for payment only for them to remain mum.

    Mr James Okafor, who lost his brother, Nwabuwa, in the crash, said he conveyed the body from Lagos to Anambra State, bore his burial expenses, and has since been taking care of the late man’s children from his meagre income.

    Also, Mrs Titi Shobowale, who lost her husband, Femi, said she had submitted the papers demanded by the airline and the insurance firm but had not received any response from them.

    “I have completed all the fromalties, yet I have not recieved any positive response from either Prestige Assurance or Dana. I am tired of the ‘come today, come tomorrow’ by the two of them,” she said.

    For Chief Obi Awani, a retiree, who lost his daughter and a nine- month-old grandson, it was a bitter tale too. According to him, after submitting all the documents demanded by the airline and the insurance firm, he was told that there was a division in his family and was advised to go and sort it out. “That was strange to me because there was no such problem among my family members,” he said.

    Efforts to get the reaction of the management of Prestige Assurance proved futile as phone calls put to its Managing Director, Dr Anand Prakash Mittal, were not picked while the short message service (SMS) sent to him failed to elicit any response.

    But the spokesman of Dana Airlines, Mr Tony Usidameh, said it was not true that Dana is uncaring. According to him, the families of about 80 families out of all the victims have been paid the mandatory $30,000. The balance would come from the reinsurers abroad, he said.

    He said the cause of the delay was not from Dana and that it was difficult for the families to obtain letters of administration from the court as demanded by law. He assured that the Nigerian Civil Aviation Authority (NCAA) and Dana Air were working with the Lagos State government to simplify the process.

    He said the insurers would only pay if they have the right documents.

    He said Dana does not delight in the suffering of the families of those who died in the crash. On the $15,000, he said it was not true. He said the law stipulates $30,000 as compensation for a victim and that is what they were paying.

    He added that another cause of the delay for payment was of multiple family members coming for claims.

    Meanwhile, lawyers representing some of the victims’families have accused the airline and its insurer of playing games with Nigerians and the families of the dead to frustrate them.

    They said it was a deception against Nigeria and its people and wondered why the management of the airline and the insurance firm were treating Nigerians like that.

    They appealed to President Goodluck Jonathan, members of the Senate and the House of Representatives, the Minister of Aviation, Mrs Stella Oduah and the National Insurance Commission (NAICOM) to prevail on the Prestige Assurance’s and Dana Air’s management to pay the mandatory $30,000 due to the surviving family members of the victims.

    They called on the Senate and House Committees on Aviation and the NCCA Director-General, Mr Harold Demuren and other Nigerians to compel Dana Airline and Prestige Assurance to pay the mandatory compensation to alleviate the sufferings prevailing in these families

    A group of legal practitioners, Dr Bunmi Awoyemi of the M.O. Awoyemi & Co., Mr Gbenga Eguntola, an aviation lawyer and Mr Aminu Ayama of H. Ibrahim & Co, Kano, who represent about 40 of the affected families, said they had done everything possible to get Prestige Assurance and the airline to alleviate the sufferings of the family members of the victims.

    Awoyemi said the law states that within 30 days from the crash date, $30,000 should be paid to those who are legally entitled to it.

    But after over five months, he said, Dana and its insurers have only paid 13 out of the 40 families. He said Prestige Assurance paid $15,000 instead of $30,000 to four more.

    He gave their names as: Rajulie Oyosoro; Ugabio Oyosoro; Jessica Ibe and Echendu Ibe. He said the others had not had any payment even after submitting their documents.

    Eguntola accused the airline and its insurer of not doing enough for the 18 ground victims whom, he said, had approached him to help seek redress.

    Dana Air was not interested in bearing their responsibilities, he alleged.

    Ayama said of the five families he represents, about 25 orphans were left without resources, adding that many of them were out of school.

  • Staco pays N1.34b claims

    Staco Insurance Plc has recorded a 27 per cent increase in claims settlement in the third quarter of the financial year.

    In a statement, it said it paid a total of N1.34 billion as claims to its customers covering various areas of its operations by the end of the third quarter of the year compared with N1.06 billion it paid as claims within the corresponding period in 2011.

    An analysis of the claims shows that N513.77 million was paid on the motor insurance policy, N272.04 million on fire insurance policies, general accident policies claimed N204.54 million, N178.68 million on oil and gas, N113.92 million on marine and aviation policies while N49.60 million was paid on bonds.

    The firm also said it has not only confirmed that it had lived up to its promise of prompt claims settlement to the public but had also proved to meet its various claims demands from customers.

    The Executive Director, Staco Insurance, Mr Bayo Fakorede, said it was part of the firm’s policy to process and settle genuine claims promptly.

    For the company to align its strategy with its objective of being the first choice provider of superior financial services with delivery being an integral benefit to all stakeholders, it seeks to add value to its customers’ needs, particularly in service delivery and meeting its clients obligation, he said.

    Bayo said it was part of the strategy of the company to ensure that its customers to assist its customers.

     

  • Insurance directory coming

    A  MEDIA group, Inspenonline, has got the nod to produce a directory for the insurance industry.

    The supporters include the National Insurance Commission, and Nigerian Council of Registered Insurance Brokers (NCRIB).

    The Project Consultant, Mr Nnamdi Duru, said the project would benefit operators as their services would be brought close to the public who in time past have been defrauded by fake operators due to inadequate information of registered operators in the industry.

    The Editor of the group, Mr Chuks Okonta, said the production of the directory has started.

    He said the project became necessary due to low level of awareness about insurance operations in the country. He noted that the project when completed would bring insurance closer to the public and help stem the rate of fake insurances, which often occur due to inadequate knowledge of locations and names of organisations operating in the industry.

    He noted that a recent study by GIZ, a German agency for sustainable development and Riskguard-Africa Limited, has revealed that no fewer than 15 insurance firms in Nigeria are known by the public.

    “The project would help the public to access with ease information of the various arms of the industry,” he said.