Insurance: Facing another challenge with fake operators

By Sunday Ojeme

Two weeks ago, the Commissioner for Insurance, Mr. Fola Daniel re-echoed the threat by fake insurers to continue their illegal operations despite efforts by the Federal Government to sanitise the sector.
At the inauguration of the National Insurance Commission unit of SERVICOM in Abuja, he said the fake insurance companies would be chased out of the market as the industry was currently undergoing reforms.
This, according to him, is to ensure that the newly approved companies are allowed to protect the rights of Nigerian especially the insured, through the payment of compensation.
He condemned the attitude of some service providers and promised harsher measures to ensure that the industry defended itself in serving Nigerians well in the spirit of SERVICOM.
Like his predecessors, the NAICOM boss has commenced another battle to rid the sector of fakes who operate in different guises. The fact that the industry was poorly regulated for a very long time in the past gave rise to the predominance of fake companies that rendered various forms of insurance services.
The problem has also been blamed on the conservative attitude of the genuine operators, who, in the past, never bothered to give enough publicity to their operations as well as protect their documents.
Even with the efforts made so far in the last four years, or so, to cleanse the sector, some operators still allow various vehicle licensing offices to retain their documents, thereby giving fillip to the offices to abuse the documents.
This is the more reason the Third Party vehicle insurance has been the most abused of all insurance policies.
In one of his public outings last year, former Commissioner for Insurance, Chief Emmanuel Chukwulozie, said the channels of premium leakage through capital flight in the oil and gas energy sector and the operations of fake insurance institutions had been closely monitored and identified. He said they were also being effectively blocked and sealed by NAICOM for optimum productivity and maximum benefit to the industry and the country at large.
To check the fake operators, NAICOM placed a ban on the sale and purchase of insurance policies and certificates in all licensing offices throughout the federation and policyholders were advised to obtain their insurance covers only in the offices of registered insurance companies.
Insurance companies were also advised to place their operational certificates issued by NAICOM conspicuously in their offices while the full implementation of the controversial Vehicle Insurance Sticker policy was expected to erase operations in the case of fake vehicle insurance.
According to him, ”We anticipate that this will not take too long. The same action is being effected in the oil and gas sector. In due course, all leakages points shall be effectively barricaded.”
Contrary to the erroneous belief that the Third Party only covers compensation for a victim’s vehicle in the event of an accident, the Third Party Insurance Act actually provides that in the event of an accident-victims will be compensated for bodily injury, death, medical expenses or property damage. Contravention of this provision attracts payment of a fine of N250,000 or one year imprisonment or both.
The Act also provides that, it is an offence to forge, alter, mutilate or deface any certificate of insurance; to use or allow being used by another person any forged, altered, mutilated or defaced certificate of insurance; to lend or borrow a certificate of insurance; and to make or have in one‘s possession, a fake certificate of insurance calculated to deceive.
Apart from the illegal operations of the licensing offices, some travel agents are also involved in issuing fake insurance covers to travelers either deliberately or ignorantly.
In 2004, an agency, which had an affiliation with an insurance company in Denmark, was in the habit of issuing insurance certificates to travelers illegally for a long time until NAICOM, under the leadership of Chief Oladipo Bailey, intervened.
To make matters worse, the insurance operators have not thought it wise to organise an interaction with the Nigeria Police, which is one agency that can help ensure that the public put a stop to patronising fakes. The illegal transaction on fake insurance documents at the licensing offices thrives because those who patronise them do that to beat only the police checkpoints.
The system has become so chaotic that even the insurance companies are finding it difficult to identify their own policy certificates, while the law enforcement agencies are completely incapacitated in that regard.
Speaking with our correspondent, the Managing Director of Union Asurance, Mr. Theo Egesi, said the activities of the fake operators had become disturbing to the genuine operators. Specifically, he said the operation thrived most at the licensing offices more because most insurance companies that had been axed had a lot of their unused documents still littering some of the offices.
He, however, said that the reforms in the industry would go a long way in checking the menace, just as he advised the genuine operators to embark on individual campaigns to enlighten motorists on the need to get genuine policy certificates from registered companies.