Lagos — The Insurance Consumers Association of Nigeria (INSCAN), the umbrella body for insurance commuters across Nigeria has backed the 'no premium no cover policy' of the National Insurance Commission (NAICOM) in line with Section 50 of the Insurance Act, 2003.
The 'no premium no cover policy' took effect January 1. Any insurance policy that is not backed by the appropriate premium, such a policy would be null and void.
INSCAN, however, tasked operators to establish premium financing options for policy takers as is done in other climes.
Premium financing involves the lending of funds to a person or company to cover the cost of an insurance premium. Premium finance loans are often provided by third party finance entity known as a "Premium Financing Company".
However, insurance companies and brokerages occasionally provide premium financing services as well. The money is paid back on agreed terms, usually on monthly basis.
Rising from an emergency meeting of the national executive, the state chairmen and coordinators of the association at their national secretariat in Lagos, last week, resolved that the, "association is in total support of the enforcement of Section 50 (1) and (2) of the Insurance Act 2003 by NAICOM."
Their resolutions were signed by the National President, Rear Admiral Isaac Areola (Rtd), and the National Secretary, Mr. Julius Bruce.
They said: "An insurance company will be justified to repudiate any claim as from the aforementioned date on which no premium has been paid except as provided in Section 69 of the Insurance Act 2003 regarding Third Party Liability Claims.
"An insured person needs not pay the total annum premium debited at the inception of cover but the insurance company will be justified to pro-rate its cover to the extent to which the deposit premium is able to carry the risk."