| Business
[ 2014-07-23 ]
NIC directs insurers to pay claims in one week The National Insurance Commission (NIC) has
developed new guidelines to compel insurance
companies to pay claims that have been established
as genuine within seven days.
The Commission believes the guidelines will help
to boost confidence in an industry that has over
the years been battered by claims redemption
challenges which have left many people in pain,
affecting confidence and trust in insurance
companies.
The NIC contends that implementation of the ‘No
Premium, No Cover’ policy has made cash-strapped
insurers solvent — which has positioned them
well to respond appropriately to claims when they
fall due.
The Deputy Commissioner of Insurance Simon Nerro
Davor, in a directive issued to insurers,
reinsurers and broking companies, said the NIC has
set August 1 this year for effective
implementation of the guidelines.
He said insurance companies that fail to abide by
the new directive risk hefty sanctions.
He has therefore asked the 24 general insurance
companies operating in the country to submit to
the NIC their respective claims manual within the
next two months.
“The payment of genuine claims in a prompt and
fair manner remains a key priority in an effort by
the NIC to raise public confidence and trust in
the insurance industry.
“In view of this and in keeping with the ‘No
Premium, No Cover’ directive to the industry,
the NIC has come out with guidelines on claims
management for compliance by non-life insurers.
“The guidelines are general in nature and relate
more specifically to timelines for the settlement
and payment of claims. They don’t provide
detailed requirements for dealing with claims.
“All non-life insurers are therefore required to
prepare and submit a claims manual to the NIC by
Tuesday, September 30, 2014. The expected
timeframes provided in the manual shall be in line
with the NIC guidelines.
“The guidelines should also be displayed at the
insurance halls of non-life insurers,” he said.
However, some insurers contacted by the B&FT
expressed resentment about the directive, arguing
that the NIC did not consult them before coming
out with the guidelines.
But the NIC contends that, as a regulator, it does
not need the permission and consent of insurance
practitioners to come out with rules for the
industry, saying: “Our primary concern is to
protect the insured and restore public confidence
in the industry”.
Some industry watchers have evaluated the coming
into force of ‘No premium, No cover’ policy as
the biggest game-changer in the industry over the
last 15 years, as the policy enjoins insurers to
collect premiums upfront before providing cover in
a bid to improve the liquidity situation of
insurance companies.
“Claims payment has been a major challenge in
the Ghanaian insurance market. Insurance companies
are in the business to pay claims, and therefore
companies should mobilise funds to pay claims even
before payment of salaries to their employees.
“Another challenge that needs to be addressed as
early as possible is premium debtors. We need to
work together as an industry to deal with the
challenge of premium debtors,” noted the
Commissioner of Insurance, Lydia Bawa. Source - Bus & Fin Times
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