NAICOM declares zero tolerance for delay in settling insurance claims

Insurance industry regulator, the National Insurance Commission (NAICOM) has issued a clear warning to insurance companies in Nigeria that delay in settlement of claims will no longer be tolerated.

The Commission said this has become necessary to restore confidence in the insurance industry, and position the sector on the path of sustainable growth for increased contribution to economy.

Segun Omosehin, commissioner for Insurance/CEO, NAICOM gave the warming Wednesday in Lagos at the 2024 Insurance Directors Conference organised by the College of Insurance and Financial Management (CIFM), with the theme: “Board Performance in the Nigerian Insurance Industry: A Governance, Risk, and Compliance (GRC) Approach”.

“Unnecessary delays in the settlement of claims will no longer be tolerated, Omosehin said, highlighting the critical need for insurers to honour their obligations to policyholders promptly, warning that failure to do so would result in strict regulatory action.

“Let me make clear this provision that, “non-payment of claims is a ground for cancellation of license”, he said.

Omosehin said, “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.”

To overcome these challenges, Omosehin said the Board as the highest policy making organ for the various institutions must demonstrate genuine commitment and strict adherence to Governance, Risk, and Compliance principles.

“If carefully implemented this will improve decision-making, increase transparency and accountability, and ultimately improve regulatory compliance.”

Speaking on further strengthening the industry for improved performance, he noted that the financial stability and soundness of our institutions are now more vital than ever.

“To remain relevant and competitive, our institutions must comply with all the relevant prudential regulations and requirements. We must begin to prepare our various entities well ahead of the Risk-Based Capital regime, so ensuring adequate capitalization is no longer optional.”

“We must prioritise robust capitalization to effectively tap into target markets and navigate current industry realities, the commissioner said.

He also informed that NAICOM, in the last one and half years have successfully examined a few of the insurance institutions using the Risk Based Supervision Approach, even though the exercise has not been fully completed.

However, we are using this medium to seek your cooperation as Directors of those institutions and demand compliance on issues that have been raised and directed to the various Boards, for attention, Omosehin urged.