Business News of Tuesday, 31 August 2021
Source: thebftonline.com
2021-08-31
Dr. Justice Yaw Ofori is Commissioner of Insurance at the NIC
The National Insurance Commission (NIC), the insurance industry regulator, has issued a directive to stop the issuance of Motor Insurance Cover Notes to motorists in the country.
In a circular signed by the Commissioner of Insurance, Dr. Justice Yaw Ofori, to all Ghana Insurance Association (GIA) and Insurance Brokers Association members, he pointed out that investigations by the Commission have revealed that the use of the cover note is a significant contributing factor in undercutting and the existence of fake motor stickers.
“In view of this, the Commission by this circular from September 1, 2021, will prohibit the use of cover notes in the Ghanaian insurance industry.” He indicated that this directive will help reduce the cancerous practice of undercutting and the proliferation of fake stickers. He however warned that failure to comply with the directive will compel the NIC to impose pecuniary penalties against companies.
He also pointed out that motor insurance continues to be the largest class of insurance business in Ghana stating that in 2020 year-end submissions of the insurance companies showed motor insurance made up almost 50% of the business sold by non-life insurance companies.
More importantly, he stated that the Commission has also undertaken a number of steps to ensure the challenges plaguing the motor insurance industry are addressed. In that respect, the Commission has initiated some initiatives.
Some of the initiatives include: Capping third party and death claims; implementation of the motor insurance database; and increased enforcement.