You need to active Javascript on your
Nigeria's leading finance and market intelligence news report.

Proposed insurance bill to enhance local aviation portfolio

… as aviation/marine contributes N53bn premium

If the Bill for an Act to repeal and consolidate insurance laws and other related matters currently at the floor of the House of Representative scales through, civil aviation policy for third-party liability will become more strengthened.

The Bill sponsored by Darlington Nwokocha, member, representing the people of Isiala Ngwa North and South Federal Constituency of Abia State, seeks to ensure that all registered aircrafts in Nigeria obtain their third-party liability cover from the local market so that accident victims are adequately compensated.

Though, Civil Aviation Act 2006 had before now made civil aviation risks compulsory for airline operators, but the insurance Bill now seeks to strengthen the powers of the National Insurance Commission (NAICOM) to be part of the regulation to ensure that there is adequate compliance.

“We have had cases in the past where some private aircraft operated freely and it was discovered after an accident had occurred that they did not have insurance from the local market,” Jude Onwunali, an insurance broker, said.

With this new law, all the aircrafts registered in Nigeria, I believe, will have their insurance first from the Nigerian market, and could be supplemented offshore after the local capacity is exhausted and that must be with NAICOM’s approval, Onwunali stated.

According to Onwunali, this offers more protection to third-party victims in case of accident, who will now enjoy adequate compensation from local insurers with support of their reinsurance counterparts both locally and internationally.

Besides that, this will enhance the revenue base of insurance companies in Nigeria and also improve their contributions to the country’s GD, he said.

Aviation, which is reported jointly with marine business, contributes about 11 percent of the total premium generated by member companies of the Nigerian Insurers Association (NIA), according to 2019 data.

Therefore, with 2020 industry total premium put at N493 billion, according to estimation of NAICOM, aviation and marine will be doing about N53 billion.

Section 69(1) of the Consolidated Bill states that, the provisions of this section shall apply in addition to the provisions of the Civil Aviation Act 2006.

According to the Bill, “Where the provisions of the Civil Aviation Act 2006 in relation to insurance matters are inconsistent with the provisions of this Bill, the provisions of this Bill shall prevail.

“A carrier operating air transport services to, from or within Nigeria, or an aerodrome operator, aviation fuel supplier, or a provider of ground handling services, traffic control services, aircraft maintenance services, or a provider of such other related or allied services as the Nigerian Civil Aviation Authority may from time to time determine, shall maintain adequate insurance covering their liabilities – under the Civil Aviation Act, 2006; and to pay compensation for damages that may be sustained by third parties.”

“Notwithstanding anything contained in the Civil Aviation Act, 2006, the policy document as an evidence of insurance cover shall be deposited by the carrier, operator or other aviation service provider with the Commission (NAICOM) not later than seven days before commencement of operation; and a carrier, operator or other aviation service provider who fails to deliver the policy document referred to in paragraph (a) of this subsection shall not be allowed to commence operation.”

According to the Bill, any carrier, operator or other aviation service provider that commences operation without having complied with the provisions of this section commits an offence and is liable on conviction to a fine of N10, 000,000.00 and any of its principal officers who is responsible shall be liable on conviction to imprisonment for a maximum term of 12 months or to both fine and imprisonment.

Get real time updates directly on you device, subscribe now.

Comments are closed.