The Nigerian Insurers Association (NIA) has called on the underwriting firms, particularly those in general business, to desist from selling third-party motor insurance policies below approved rates or face sanctions.
The issue of rate cutting, particularly in third-party motor insurance, has been a major challenge facing the industry as the sector loses N135 billion yearly to fake insurers.
Third-party motor insurance, the least insurance requirement for vehicles plying the nation’s roads, which was previously N5, 000 has been increased to N15,000 yearly premium.
The NIA, in a recent circular titled, ‘Adherence to the Approved Rates for Motor Insurance’ and signed by the Director General of the association, Yetunde Ilori, said following the decision reached at the 2023 CEOs Retreat, it has become relevant for the association to reiterate the need for underwriters to sell motor insurance policies at the approved N15,000.
Ilori noted that the association has received various reports that some underwriting firms are selling below the approved rates, warning that it would not contribute to the growth of the industry but breeds serious reputation issues.
She said the governing council was displeased with the activities of agents in licencing offices engaged by member companies to sell third-party motor insurance policies at discounted rates.
She said the NIA would not hesitate to report defaulting companies to NAICOM, urging companies to ensure compliance to avoid regulatory sanction.
