New insurance bill seeks compensation for victims of liquidated companies
The Nigerian Insurance Reform Bill, which is now seeking presidential approval, aims to increase consumer protection by creating a compensation fund for victims of collapsed insurance businesses.Kunle Ahmed, Chairman of the Nigerian Insurers Association, announced this during a quarterly news conference in Lagos on Tuesday, noting that the bill will also establish a fund for uninsured traffic accident victims.
Ahmed hailed the Bill as a critical piece of legislation designed to revamp Nigeria's insurance regulatory system.
"The Insurance Reform Bill includes safeguards that ensure proper policyholder protection. A fund has been established to meet the requests of policyholders whose primary insurance firm has been liquidated or is experiencing difficulties, in response to recent industry events," he stated.
Ahmed also said that the measure provides a fund for uninsured traffic accident victims.
He stated that these elements of the plan are likely to increase trust in the insurance business.
"The bill also reflects increased capital requirements, which we believe will lead to stronger and more virile insurance companies that can develop new products, and addressing the pain points of consumers," Ahmed told me.
On the ongoing Tax Reform Bill in the National Assembly, he explained that the NIA has made a submission to the government, emphasising that a portion of insurance premiums are distributed to shareholders and should be taxed accordingly.
"Changes to any tax plan might have an influence on several sectors of the economy, including insurance. We have made a representation to the government on the taxation of insurance premiums, underlining that some premiums belong to shareholders, particularly in the life insurance sector, and this matter is being addressed seriously," he added.
Ahmed thanked the Inspector General of Police and the Commissioner for Insurance for their efforts to enforce third-party automobile insurance in Nigeria and ensure Nigerians' safety on the roads.
He stated, "For us at NIA, enforcing the third-party policy primarily benefits policyholders."
"Policyholders are entitled to compensation for their liabilities in terms of injury or death to third parties, which is unlimited."
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