By NBF News

Insurance companies that fail to pay customers claims promptly stand the risk of losing their licences, the National Insurance Commission (NAICOM) warns. NAICOM gave this warning in the guidelines for oil and gas business released recently.

The guidelines mandate insurance operators to, henceforth, administer claims in accordance to standard insurance practice, adding that this should be considered as a sole responsibility.

The commission directed that discharged claims should be settled immediately as prescribed under the Insurance Act, 2003, warning that failure to do so would attract sanctions as stipulated by section 70 (2) of the Act.

It warned 'Failure to settle discharged claims shall attract sanctions as stipulated by Section 7o (2) of the Insurance Act 2003. Consistent failure to settle discharged claims promptly may lead to the withdrawal of the licence of the insurer as stipulated by section 8 (1) (m) of the Insurance Act 2003 and the insurer may be would up by the commission in accordance with the provisions of section8 and 32 (1) (b) of the Insurance Act 2003.'

Further more NAICON stated that 'No foreign loss adjuster shall attend to any claims in Nigeria's oil and gas sector without the express permission on such terms and conditions as may be stipulated in the approval, adding that foreign loss adjuster shall handle the assignment with and in collaboration with at least one loss adjusters registered under the Insurance Act, 2003.'

Commissioner for Insurance, Mr. Fola Daniel, who sees failure to settle claims as an aberration, disclosed that NAICOM making efforts to ensure prompt settlement of claims, stressing that individuals, corporate bodies or government establishments, which have genuine unsettled claims against any insurance company, should bring their complaints to NAICOM.

He explained that, 'the Consumer Protection Unit of the commission has been properly positioned to handle such complaints with dispatch warning that any defaulting company will be required to pay such claims. He said that non-payment of genuine claims was enough ground to suspend or cancel the operational certificate of a registered insurance company.

'This is why NAICOM advises policy holders to ensure that they obtain their policies from NAICOM-registered insurance companies only. A policy obtained from a fake insurance institution has no liability attached and no compensation can be received if such complaints are made to the commission,' Fola added.