|Some insurance operators have expressed concern over the 90 days period given to underwriters to settle claims saying it is being exploited by some firms to delay claims payment.
According to the operators, such action being exhibited by a few players could continue to rub off on the entire industry, even as the National Insurance Commission, NAICOM, is restricted from immediately punishing claim offenders. Section 70 of the Insurance Act 2003 states that: “In every case where a claim is made in writing by the insured or any other party entitled thereto under insurance policy, the insurer shall- (a) where he accepts liability, settle the claim not later than 90 days after the issuance of discharge voucher; (b) where any claim remains unpaid as provided in (a) above, the insured may request the Commission to effect the payment from the statutory deposit of the insurer and the Commission shall have power to effect such payment ; or (c) where he does not accept liability, deliver a statement in writing stating the reason for disclaiming such liability to the person making the claim or his authorized representative not later than 90 days from the date on which the person delivered his claim to the insurer. (2) Any insurer who contravenes this section commits an offence and on conviction is liable to a fine of N500,000.”
Speaking on the issue, Managing Director of Leadway Assurance Company Limited, Mr. Oye Hassan-Odukale said, “The law says that we must pay claims within 90 days after discharge voucher has been issued. However, we want to pay claims immediately after discharge voucher has been issued. But not all insurance companies have the capability to do so and we cannot do anything about that until the law changes. “We are anxious to pay claims immediately since we now collect premium immediately. Unfortunately, we cannot change the law. It is a moral obligation on our path that we must pay claims immediately; however the insurance Act has not been changed.
“In the banking sector, the banks are divided into tiers. Although we have about 56 insurance companies, they are not categorized into tiers, but they are not all the same. We know the effect of the damage of a company not paying claims on time. If a company is not able to pay claims, they will say insurance companies in Nigeria don’t pay claims. They will not say company X is the one not paying claims. So it pains us also to go through that. “There are some companies creating problems for us and we are not happy about that. But the law takes a while to amend and even NAICOM is restricted by the law because it only carries out what is in the law. They are not happy about it but they cannot do anything about it.”
Also speaking on the issue, Managing Director of NSIA Insurance, Mrs. Ebele Nwachukwu said, “There are some misconceptions on the part of the public on how to make claims. They should know that it is a process driven thing. Insurance is a pool of funds that we are holding in trust for so many people so there has to be a process for when we take money out of that pool. In essence, we have to be responsible about it.” Director General of Nigerian Insurers Association, NIA, Mrs. Yetunde Ilori said, “The NIA set up a claims bureau chaired by a retired judge. Insurance consumers should know that if a company is refusing to settle their claims, the NIA claims bureau is there to adjudicate on the matter and ensure that all genuine claims are settled.”