The National Insurance Company (NIC) has warned it will sanction Insurance companies which are failing to implement the ?No premium No cover policy?. The policy was introduced to compel insurance companies to pay claims within seven days. ?
Commissioner of Insurance of the National Insurance Commission Lydia Lariba Bawa in an interview Citi Business News says that the compliance rate had been very good so far, in spite of a few teething challenges.
?For the clients, a few of them complained initially but they have come to understand what it is all about; that it is in their own interest to do it and I?m sure that at the end of the day, we are all going to be better off,?
The NIC from April, this year, started enforcing its cash and carry system when all insurance companies were directed to provide cover for only to the insured that had been fully paid for.
This meant that for all types of insurance, especially non-life insurance, customers had to pay premiums upfront to receive cover for the risks they have insured against.
The NIC says the decision has now put cash-strapped insurers in a better position to promptly pay claims.
The warning was issued at the launched of Ghana?s third Reinsurance Company, the GN Reinsurance Company Limited.
Commissioner of Insurance of the National Insurance Commission Lydia Lariba Bawa says some insurance companies have already been sanctioned for not implementing the policy as directed.
?At the end 2013 30% of premiums were not collected and when the insurance companies do not collect the premiums to invest, they are not able to pay claims and the public loses confidence e in the industry. That is what drove us to implement the ?no premium no cover policy which I will say has been a huge success with the insurance companies benefiting. We are say that if the commission gets hold of any insurer who is sell a policy on credit we will sanction that person without fail.?
The commissioner of insurance disclosed to Citi Business News that some insurance companies have been punished because of the floating of this ?no premium, no cover? policy because they were caught selling policies on credit. She added that offenders will immediately be made to pay ten times the price of the policy they were selling on credit.
Meanwhile The Chief Executive Officer of GN Reinsurance Company Limited (GN RE) Joseph Kusi ? Tieku whose company was being launched told Citi Business news that GN RE will focus on not only on better customer service but will give continues technical advice and training to insurance companies they will deal it.
GN Reinsurance Company Limited (GN RE), the third indigenous reinsurance has been launched, with the aim to strengthen and rejuvenate the insurance industry.
The company is leveraging on its financial strength and the expertise of its managers to strategically impact the limited local reinsurance industry and the entire Africa region.
GN RE enters the market with an initial capital of GH? 80 million, which would be available to the local insurance sector and can write up to GH? 25 million.
The company is the latest addition to the Groupe Nduom conglomerate, a privately held business group with member companies in financial services, hospitality, real estate, Information technology, media and entertainment.
NORVAN ACQUAH ? HAYFORD/BUSINESS.CITIFMONLINE.COM