Insurance Act Nigeria
Before 2003, Nigeria´s Insurance companies were regulated by the Decree No. 2 of 1997. From that year on, the Insurance Act took its place, taking some of the old regulations and adding some new rules that were definitely necessary.
The amendments to this decree were exactly what the Insurance Business needed to evolve and develop. Iit overrules the field, making it a regulated and fairer environment in which to develop insurance claims. Here we will highlight the most important modifications between both laws and how they apply to the business:
One of the most relevant changes in the Insurance Act Nigeria was that from 2003 no insurer can commence insurance business without prior registration with the National Insurance Commission (NAICOM). And an additional clause to ensure that only credible people are authorized to control this regulation. This is in of the main reasons why insurance companies are being developed at such a fast pace, because as you can imagine, it reduces the risk of dealing with dubious brokers. After this, in 2004, NAICOM publish an updated list of the approved insurers and reinsurers, which facilitated where to direct yourself to contact an insurance broker.
Another one of the big changes in the 2003 legislation was the introduction of the No Premium, No Cover policy, which states “The receipt of an insurance premium shall be a condition precedent to a valid contract of insurance and there shall be no cover in respect of an insurance risk unless the premium is paid in advance.” This means that payment of premium full condition is mandatory in order to be able to enforce the contract and a portion of the agreed payment will not be deemed as enough to proceed with said contract.
The Insurance Act Nigeria introduced a modification to any motor insurance claim was also made and it stated that in case of an accident involving one or more vehicles there will be no need to submit a report or a claim if the proof is visible and evident. However, if serious injury or death occurs, a report must be filed in order to be able to go through the process. Failure to do so, will result in an adverse effect in the claims of the insured.
Among the modifications, section 64 states that every building under construction where one can see more than two floors and the insurance must cover the liability of the owner of the building. And section 65 makes the insurance of public building mandatory.
Understanding these modifications and realizing what the rules of the game currently are, gives you an advantage and an opportunity to defend yourself in case of a failed claim. The better you understand this regulation, the more prepared you are to fully enjoy your insurance services and feel protected. The Insurance Act Nigeria protects everyone involved in a much better way than the former laws.