Life, group life, and motor insurance policyholders topped the list in the latest compilation of complaints against insurance companies published by the National Insurance Commission.
According to The PUNCH analysis of the complaints, the three classes of policyholders have disputed claims worth about N22.65bn, with the highest value being group life assurance.
Holders of the Group Life Assurance policy, according to the complaints list, are seeking about N21.01bn in claims with an additional $11,897,019, while life policyholders, which have the highest number of complaints (over 380), recorded about N1.145bn in complaints, while motor insurance policyholders filed N180.24bn in complaints.
Some motor insurance complaints were denominated in dollars worth $2.20m.
According to Investopedia, “Life insurance acts as a financial safety net for your family. If you die while it’s active, your insurance company pays a sum of money to the people you’ve named in your policy (your beneficiaries). This money, known as the death benefit, can help your beneficiaries replace your lost income and cover expenses like housing, food, and utility bills. It is taken out by an individual, while a group life insurance is taken out by an employer of labour.”
The provisions of Section 4(5) of the Pension Reform Act (2014) mandate employers of labour to buy group life insurance policies for their workforce. The policy, which ensures that dependents of a deceased employee receive three times his total annual emolument, was meant to cushion the effect of death on a deceased worker’s family.
Motor insurance provides cover for vehicles plying Nigerian roads; it can be third-party motor insurance, which is currently being enforced by the Nigeria Police; comprehensive insurance, which protects both owner and third party; and then there is Goods in Transit Cover.
In all, there are complaints from 1571 policyholders against 46 insurance companies. The company with the highest number of complaints was IGI with 327, with some dating as far back as 2020 and 2021, followed by African Alliance Insurance with 282 complaints, mostly from annuitants, which is expected given that NAICOM sacked its board and management in October and appointed an interim board for the firm.
Another company with a high number of complaints was Standard Alliance Insurance from 229 policyholders.
On the other end of the stick, Stanbic Insurance had the lowest number of complaints, one, followed by Heirs Life, while the likes of emPle General, FIN Insurance, Mutual General, Starling Assurance, and Tangerine General recorded four complaints each.
While most of the complaints had the disputed amount listed, some weren’t listed in the complaints list.
NAICOM has maintained a zero-tolerance stance for non-payment of claims, as it opined that such practice erodes public trust in the sector.
At the 2024 Insurance Directors Conference organised by the College of Insurance and Financial Management with the theme ‘Board Performance in the Nigerian Insurance Industry: A Governance, Risk, and Compliance Approach,’ the Commissioner for Insurance, Olusegun Omosehin, said failure to settle claims promptly could lead to loss of license.
He said, “Unnecessary delays in the settlement of claims will no longer be tolerated. Let me make clear this provision that ‘non-payment of claims is a ground for cancellation of license.
“As a commission, we are committed to strictly enforcing the law and taking swift action against any insurer failing to meet their claim obligations. Simply put, if a company cannot honour legitimate claims, it has no place in our industry.”
