By Favour Nnabugwu
THIRTY-three states and the Federal Capital Territory (FCT) are yet to enforce compulsory insurance in the states.
This is as the National Insurance Commission (NAICOM) is making frantic effort to meet with the states in order to sign Memorandum of Understanding with them to enforce compulsory insurance in the state.
The 33 States and the FCT are yet to enforce Sections 64 and 65 of the Insurance Act of 2003 which relate to insurance of buildings under construction and public buildings.
The Commissioner for Insurance, Alhaji Mohammed Kari said the insurance industry needs to think out of the box to ensure that the compulsory insurance is enforced across the country.
Kari said the Commission is mapping out plans to sign MoU with State governments across the country for enforcement of compulsory insurance
“The MoU that we will sign with the States will enable them earn income from the enforcement because we believe that if there is an income definitely they will be mobilize. And they keep talking about contributing to their Internally Generated Revenue (IGR) to enhance that.”
He added, “We have heard from the States because we believe we can only improve on penetration if we enforce compulsory insurances. The challenges being that our law is a federal law, it doesn’t apply in States and the States also have to pass some local laws that will enable us enforce.”
Compulsory insurance refers to those classes of insurance made compulsory by law, with the objective of providing protection to third parties and the general public.
There are five insurance products made compulsory by the insurance Act 2003 and other related legislations.
The Commission has the statutory power to enforce these products, namely group life insurance in line with Pension Act 2014; Building under construction- section 64 of the Insurance Act 2003; Public building liability insurance – section 65 of the Insurance Act 2003; Motor Vehicle (Third party) Insurance Act 1945; Health Care professional Indemnity Insurance under section 45 of the NHIS Act 1999.