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No premium, no cover’ not for micro insurance

31 May 2014, 13:47

Lagos - The Commissioner for Insurance, National Insurance Commission (NAICOM), Fola Daniel, on Thursday said the  "no premium, no cover"  policy would not apply to micro insurance businesses.

Daniel said the policy would not affect micro insurance business because it was a growth area in the industry that needed to be encouraged.

He also said that though micro insurance dealt with a large number of people, the sum insured by it was always small.

"Traditionally, micro insurance products are never sold on credit. After the first premium deposits, subsequent ones are made easy.

"Under micro insurance, we are talking about designing simplified policy as low as N200,'' Daniel said.

The commissioner disclosed that some interests insured under micro insurance were already incurring losses but that their claims were being promptly settled.

He explained that "no premium, no cover'' became necessary because of big corporate offices which were not giving priority to payment of premiums to renew their policies.

He decried the attitude of such organisations, saying that "when they have an insured loss they rush to pay the premium and want it back dated so that they could make claims for losses.

"Over the years the huge amount of unpaid and outstanding premium in insurance companies’ financial reports became a problem for us as a regulator.

"With the enforcement of no premium no cover, l am certain that the 2013 accounts of the companies will come out neat,” he said.

Daniel said that if premiums were being paid, no insurance company would shy away from paying claims when losses on the insured occurred.

He said that Nigerians deserved the best of the insurance industry and that NAICOM was ready to ensure that they got it.

-  NAN

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