Industry losing millions of dollar on ECOWAS Brown Card
The West African insurance market is losing huge millions of dollars on ECOWAS Brown Card following the activities of fraudsters who cash in on public ignorance and loop holes of the 30-year-old system to make cheap money.
The implication of this development is stunted capacity of genuine operators and national bureaux in the sub-region to meet claims obligation, particularly in the Francophone countries where third party liability is said to be unlimited.
The Brown Card Insurance Scheme is basically a third party liability cover whereby members undertake to provide compensation for accidental damage to property, bodily injury and death arising from the use of motor vehicles within the sub-region.
Henrietta N. Anyanna, secretary general, Nigerian National Bureau, ECOWAS Brown Card Insurance Scheme made the disclosure at the Maiden Edition of the Nigerian Insurance Association(NIA) Seminar for Insurance Journalist held in Ijebu Ode, Ogun State.
She said the West African insurance market is losing huge premium that could have built capacity to strengthen the regional market, stating that government of participating countries need to be part of the scheme to ensure effective monitoring and supervision.
“A vibrant insurance scheme will rely on a sophisticated regulatory framework and strong supervision by regulators and the government to ensures adequate protection for third parties/policy holders and consequently enhance proper functioning of the scheme.
“There is need to forge strategic alliance with some crucial government agencies for greater penetration and successful operation of the Brown Card scheme. They include the Customs, the Immigration, and the Police Department.Through these agencies, the scheme will be entrenched in the minds of motorists who traverse the international borders.”
Anyanna noted that the supervisory authority in the participating countries will play a key role in assessing and monitoring the various national bureaux to ensure claims fund has been set up in each bureau as directed by the Council; ensure claims are paid as at when due and set rules for the competency and integrity of Directors.
According to her, this has led to the involvement of the Nigeria’s National Insurance Commission (NAICOM) and the Federal Government in the management of the scheme.
“A lot of people do not know where to procure the document. As a result they fall into the hands of fraudsters from whom they collect fake certificate and end up being caught and sent to jail in neighbouring countries.” According to her, Nigeria has the largest market in the sub-region with 32 member companies and Brown Card is issued to insurance member companies whose premium income from the scheme appreciated remarkably rising from N3.5 million in 2010 to N8.5 million in 2012 and about N10 million in 2013. While similar experience was also seen in other markets.
The Brown Card scheme was designed among others to guarantee victims of road accident within the sub-region fair and prompt payment for damages including bodily injury caused to nationals of a West African country by non -resident motorists from other ECOWAS member states.
The scheme will also promote trade and cultural integration among the countries in the West African sub-region; develop international links and exchange as well as the extension of the insurance market within the sub-region and establish a common system for claims settlement; which will lead to harmonisation between the member states, laws and regulation governing motor insurance.
It is also to offer a scheme similar to the successful international insurance schemes in force in Europe (Green Card Scheme), in Central African sub-region (Pink Card Scheme) and in the Arab Countries (Yellow Card Scheme).
By: Modestus Anaesoronye