CONCEPT OF MARKET DEVELOPMENT AND RESTRUCTURING INITIATIVE (4)
By Yinka Bolarinwa
LAST week we addressed the issue of employer's liability in the work situation, and the benefits stipulated by law when we cited the Workmen's Compensation Decree No 17 of 1987. Today, we mov on to motor third party insurance.
Motor third party insurance policy, I believe is not new, but its relevance has never been emphasized in the past. Apart from the fact that this policy is made compulsory by Section 3 of Insurance Act 1945 and it is primarily designed to cover an insured's legal liability to third parties in respect of any damages to the property of such third parties and for any injury or death to third parties from the use of the motor vehicle.
It also relieves the insured from solicitors fees for the legal representation of the insured or his driver at any judicial proceedings arising from an accident which may give rise to a claim under the policy and any other expenses of the insured authorized by the insurer, preferably in writing.
Compliance with the law that enforces these products has become mandatory as law enforcement agents have been saddled with the responsibilities of ensuring that all Nigerians abide by the law. The initiative began with official launch of these products in various states of the federation, especially in the six geopolitical zones of the country.
Penalties outweigh benefits
We will not discuss the very many punitive penalties where an entrepreneur or business or individual fails to comply with the above-mentioned compulsory insurance policy, but to present a full picture of the policy, it has became paramount to likewise mention it.
As a matter of fact, the statutory penalties outstrip whatever short-term savings the entrepreneur or business owner might seem to enjoy by non-compliance with these compulsory insurance regulations. Therefore, it is advisable that one picks these insurances rather than await imposition of penalties.
Having critically reveals the importance and workings of the MDRI, in addition to all the aforementioned benefits, the National Insurance Commission also intends to use the initiative to create about 250,000 new jobs in the sector, increase insurance contribution to the Gross Domestic Product from the current 0.72 per cent to over three per cent, and increase insurance premium per capita from the current N 1,200 to N 7,500 by 2012.
With the Market Development and Restructuring Initiative, National Insurance Commission will bridge the knowledge gap of the young insurance practitioners and also engage in consumer education and protection activities.
However, the new act on Workmen's Compensation Insurance recently signed into law by the Federal Government of Nigeria, ceding the administration of this policy to the Nigeria Social Insurance Trust Fund, just like the Pension Scheme is a major setback to this initiative (MDRI).