What stakeholders can do to drive compulsory insurances

The insurance industry regulator, the National Insurance Commission (NAICOM) no doubt has done a fantastic work in promoting six different compulsory insurances in the country, which today should form the new growth ladder for the insurance industry.

NAICOM through its project called “Market Development and Restructuring Initiative (MDRI) was poised at installing necessary reforms in the area of industry capacity, market efficiency and consumer protection in the Nigerian Insurance market, with the target to deepen, grow and move the industry gross premium from trillion.

The compulsory insurance includes Motor Third party Insurance of section 68 of the Insurance Act 2003; Buildings under construction of section 64 of the Insurance Act 2003; Occupiers liability insurance of section 65 of the Insurance Act 2003; Group life Insurance in line with the Pension Reform Act 2004 and Health Care Professional Indemnity Insurance-under section 45 of the NHIS Act 1999.

But as beautiful as these initiatives, not much success has been achieved in terms of implementation and enforcement of the laws, so have yet to impact on the industry revenue generation.

Efforts of the commission to embark on enforcement have also not yielded much fruit as a result of lack of human and material capacity to drive the process.

The security agencies including the police and the road safety corps that should complement the industry to ensure enforcements have also not been efficient having compromised in many instances, and this has further worsened the enforcement process.

Analysts are therefore worried that the whole effort to develop the industry through the compulsory insurance would amount to policy failure except other stakeholders are brought into the picture and educated to understand their relevance and opportunities therein.

To the analysts, these missing partners are needed to compel affected and potential insurance consumers see the compulsory insurance as offence not to take them, otherwise,  there is no amount of preaching or moral suasion that would make people here take insurance on their own.

This therefore brings us to the importance of lawyers as public prosecutors to be part of the enforcement process to make it work. How will the lawyers come in?

Across the country are ongoing constructions works are public buildings, which require building liability insurance or building construction insurances against third party liability, meaning that owners or promoters of such projects or properties have committed certain offences punishable by law, and therefore needs to be prosecuted.

What the lawyers need to do at this time is simply to sue the offenders and get them persecuted. New work for lawyers, new source of income, an analyst said.

For instance, Section 64(1) of the 2003 Insurance Act states that “No person shall cause to be constructed any building of more than two floors without insuring with a registered insurer, his liability in respect of construction risks caused by his negligence or the negligence of his servants, agents or consultants, which may result in bodily injury or loss of life to or damage to property of any workman on the site or of any member of the public.

According to the law, the duty to insure under subsection (1) of this section shall arise when a building is under construction.

Subsection three states that a person who contravenes subsection (1) of this section commits an offence and on conviction shall be liable to a fine of N250, 000 or imprisonment for three years or both.

While session 65 states that every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood. “Public building”, in this section includes a tenement house, hostel, a building occupied by a tenant, lodger or licensee and any building to which members of the public have ingress and aggress for the purpose of obtaining educational or medical service, or for the purpose of recreation or transaction of business.The insurance policy under subsection (1) shall cover the legal liabilities of an owner or occupier of premises in respect of loss of or damage to property or bodily injury or death suffered by any user of the premises and third parties.

An occupier or owner of premises who is in default of this section commits an offence and is liable on conviction to a fine of not more than N100,000 or to imprisonment for one year or both.