Towards Active Enforcement of the “No Premium, No Cover ” Provision of the Insurance Act 2003

Abstract

The insurance sector in Nigeria has great potential for growth. This has to do with the country’s huge population advantage and other deliberate policies of the government that are designed to grow the sector specifically. Despite these obvious advantages, the insurance sector in Nigeria has remained relatively stagnant; the chief reason being huge and mounting unremitted insurance premiums. Although Section 50(1) of the Insurance Act 2003 forbids selling insurance policies on credit, the section was observed more in breach than in obedience. It is therefore heartwarming to note that the insurance regulator, the National Insurance Commission (NAICOM), has, since 2013, begun active enforcement of Section 50(1) of the Insurance Act 2003. NAICOM has demonstrated its readiness to enforce the said provision of the Insurance Act 2003 by issuing and releasing to the insurance industry in Nigeria, specific guidelines on premium collection and remittance. Given effective supervision of the insurance institutions by the regulator and maximum stakeholders’ cooperation, it is anticipated that enforcement of Section 50(1) of the Insurance Act 2003 will assist the insurance industry in Nigeria to ultimately address the menace of unremitted insurance premiums, which has plagued the sector for decades.   

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