Despite rejection by insurance consumers and other stakeholders, insurance companies have commenced implementation of the 200 per cent rise in Third Party Motor (TPM), insurance premium increase of N15,000 from N5,000.
Accordingly, the Insurance Consumers Association of Nigeria (INSCAN) said its council would decide on the next line of action very soon.
The National Insurance Commission (NAICOM) on December 23, 2022, increased TPM insurance premium rate to N15,000 from N5000. It took effect on January 1 this year.
NAICOM also increased Third Party Property Damage, TPPD, which is the limit of claims an insured can enjoy on the policy to N3 million from N1 million.
Reacting on the implementation, National Coordinator of INSCAN, Chief Yemi Soladoye, said the move is improper, adding that the Association would come out with a position soon.
Soladoye said: “The Council will decide on our next line of action but the major step of sensitising Nigerians is already achieved. This does not erode the fact that NAICOM’s directive on TPM premium increase was not subjected to civilized trade practices.”
Efforts to reach the spokesperson of NAICOM proved abortive as he was unavailable at press time.
Meanwhile, INSCAN has rejected the increase, describing it as self-serving and anti-consumer.
In a letter to NAICOM, INSCAN said the increase was hurriedly ordered without consideration of the economic situation of most Nigerians at the moment.
The letter, titled “Demand for Reversal of Your Policy Directive on the Increase of Third Party Motor Insurance Premium in Nigeria by 200% under One (1) Week Notice to the Nigeria Insurance Consumers” and signed by its National Coordinator, Chief Yemi Soladoye, INSCAN demanded that NAICOM reversed the increase, pending proper consideration of the grey areas of the directive.
INSCAN said: “Your policy directive on TPM premium increase was not subjected to civilized trade practices, professionally-accepted insurance principles, transparent customer-oriented regulations and humane attention to the economic situation of most Nigerians at the moment before you hurriedly passed same.
Meanwhile, motorists have expressed sadness over the increasing financial burden imposed with the kick-off of the new motor premium insurance rates.
Vehicle owners are not happy that, while income remain constant and in some cases dwindling, the NAICOM found it necessary to increase the misery of vehicle owners in the country.
James Oko, a commercial driver said, this will in the long run add to transportation cost, as the additional expenses will have to be passed on to final consumers – passengers.
Olu Fagba, a retired civil servant said both government and the private sector have become highly inconsiderate of the populace they are meant to serve.
“The banks are perhaps the worse culprits. They have introduced charges at these hard times that will make our ancestors turn in their graves”, he said.
The NAICOM also, however increased the benefits to motorists including those on the most popular third-party class to N3 million from N1 million.
Although the regulator had specified Sunday, January 1 as the kick-off date of the new rates, the date, however, fell on a weekend while Monday, January 2 was also a public holiday on which underwriting firms did not open for business.
The policy was a kind of blessing to the insurance industry as policyholders that have abandoned insurance, came back to renew at the old rate of N5,000 to beat the new rates of N15,000 for the most popular class, the third-party.
But those whose motor insurance are not due immediately are angry that the industry regulators are insensitive to the plight of Nigerians.
“I think they are intentionally pushing people to the wall, and it will be very unpleasant when they eventually react”, said Moji Adesuwa, a business woman in Lagos.
