02 December 2013, Accra – The new Ghanaian Commissioner for Insurance, Lydia Bawa has embraced the ‘no premium no cover policy’ of the insurance industry, saying it is the only way to end the menace of underwriting on credit.
She said the Ghanaian industry has set January 2, as kick-off date for the implementation of the policy.
Bawa, who was in the country for the just-concluded West African Insurance Companies Association (WAICA) Educational Conference in Lagos, said she came to tap from the experience of the regulatory agency, the National Insurance Commission (NAICOM) and insurance operators in the country, particularly their experience since the enforcement of the policy in the country.
She noted that the menace of granting insurance cover on credit had stemmed the growth of the industry as most operators find it difficult to pay claims due to lack of fund.
She said: ”The problem we have in Ghana is about payment of claims. Insurance companies are not paying claims, and that is giving us a bad name. The insurers are not paying claims because they are underwriting on credit. So, they are not able to generate enough premiums, invest and make claims.
“I have learnt from the industry. From discussion with Nigerian insurance Commissioner, Fola Daniel, I got to know that he introduced ‘no premium no cover policy’, to halt the sale of insurance on credit and it is working well for the industry.
“With the policy, premiums are paid up front, underwriters collect their premiums, invest and pay claims and everybody is happy. So, I have decided to implement this effect from January 2, 2014. I have the government’s support to go ahead with it. At this stage, I have written to the industry players, for their comments, and after that, I would go ahead with the policy.
“I believe it will restore the confidence that is already lost by policyholders and the general public. This is one major project I have taken as the new Commissioner.“
– The Nation