FG Reads Riot Act to Insurance Firms Over Claims Payment
Top insurance executives were taken aback on Monday as the Federal Government issued a strong warning to insurance firms over default in the payment of claims to investors.
The Minister of Finance, Dr. Shamsuddeen Usman, who spoke in Abuja at an insurance summit that attracted top executives said, ”Any insurance practitioner who still believes that insurance is all about collecting premiums and repudiating genuine claims no longer belongs to the changing paradigm in the insurance sub sector of the Nigerian economy.”
Nigeria‘s insurance industry image has been battered in time past due to the failure of companies to pay claims to clients.
Usman said the era when insurance firms shirked their responsibility in honouring claims obligations to their clients was over.
The minister said the ”confidence in the insurance industry had to be speedily restored.” He noted that while adequate capital base was a necessary condition for confidence building, it was definitely not sufficient. ”Prompt claims settlement is an absolute necessity. In addition, international best practices have to be strongly inculcated,” he said.
Usman said regulatory agencies would no longer fold their arms and watch insurance firms refuse the payment of claims to investors.
The minister noted that to restore integrity in the sector; the Federal Government had directed the National Insurance Commission to scrutinise the appointment of board members of insurance firms before confirmation. According to him, insurance chiefs must pay claims to engender investor confidence to the sector.
He said that the potential growth of the insurance sector was limited by the ability to move to that level where claims payment would no longer be in doubt.
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