Third Party Motor insurance to sell above N5,000 minimum rate by January

Except there are last minute changes in its processes, the National Insurance Commission (NAICOM) will in the next three months announce a higher tariff for Third Party Motor insurance policy for Nigerians. Majority of insurance companies in the market currently charge N5,000 for Third Part Motor insurance which is the minimum rate prescribed by NAICOM.

But industry sources said that barring any unforeseen circumstances, motorists in Nigeria will from January 1, next year; pay more for their Third Party motor insurance policy.

Confirming this in Lagos, last week, members of the Insurers Committee said plans were being concluded to enable the National Insurance Commission (NAICOM) announce the new price.

The Chairman of the Sub- Committee, Publicity and Communication, Mrs. Ebelechukwu Nwachukwu, said that the committee was working on the review and that the Nigeria Insurers Association (NIA) would conclude and submit its report to the regulator by November.

“By January 1, 2022, the regulator should be able to announce a scientific new price for the third party insurance policy that will also include the ECOWAS Brown Card,” she said.

According to her, the committee had an interaction with representatives from ECOWAS on how to process and issue the ECOWAS brown card with motor insurance and how it will work in the Nigerian market.

Nwachukwu said that NAICOM, during the meeting, also highlighted some key buckets of risks that it would be using to measure insurance firms when it visits for the Risk Based Supervision (RBS). She listed the risks as: Credit Risk, Liquidity Risk, Market Risk, Insurance Risk , Operational Risk, Legal Regulatory Risk, Compliance Risk and Strategic Risk.

“NAICOM did a test run of the RBS in five insurance companies, and following the outcome of the assessment from the firms, the regulator came up with highlights of the risks

“Highlighting the risk is good for the underwriters, so that we can go back in-house to ensure that our reports are standard when it comes to reporting RBS to the regulator, ” she said. On the newly unveiled. NAICOM portal, Nwachukwu hinted that it had been working effectively since it was launched last month.

She said it was making the work of insurers easier because their operations were now being monitored live online by the regulator Nwachukwu said that the underwriters would keep interacting with the regulator on how to improve on its operations.

According to her, many insurance companies are yet to comply 100 per cent as the transactions are going live because some still bundle their transactions to report later.

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