Insurance Policy and the Nigerian Law
Considering the risky nature of doing business in the 21st
century, the threats hounding our lives and the unfortunate reality of
accidents steering our way, there is every reason why an insurance policy
should be considered to be somewhat a compulsory need. Insurance laws
will vary from nation to nation based on what legislators in each
country think will be best for the citizens (policyholders) and the
insurance providers in general. In Nigeria, while there are dozens of
renowned corporations extending their services in the insurance
industry, it is generally important to understand the insurance laws of
the land and the nature of insurance policies available before you can settle for your ideal plan whether for business or personal purposes.
National Insurance Commission (NAICOM)
Established by law, the National
Insurance Commission (NAICOM) is a statutory body of the Federal
Government. As the industry regulator and as set out in the Nigerian
Insurance Act 2003 – NAICOM reinvigorates insurance practice, use and
regulations in the nation. In 2011, NAICOM had fixed the end of March
that year as the date by which all compulsory insurance policies, under
various Nigerian statutes, would be fully enforced and penalties imposed
to non-compliant players.
Compulsory Insurance Policies
About sixteen insurance laws were made
compulsory to guarantee the protection of lives and properties as
stipulated in the 2003 Act. The need to enhance economic growth and
national development were the other factors motivating the imposition of
these laws. Out of these 16 compulsory laws, five fall under the
enforcement of the National Insurance Commission. These include:
a) Statutory Group Life Insurance – this law requires that all employers should make up group insurance premium payments so as to maintain the life insurance (policy) to protect an employee for minimum 3 times the total yearly emolument of the employee.
b) Health Care Professional Liability Insurance
– all health care service providers in Nigeria must obtain and retain a
professional indemnity insurance cover from an insurance provider
listed and approved by the National Health Insurance Scheme (NHIS) Council.
c) Builders Liability Insurance
– real property builders that have more than 2 floors are required to
register and insure the building from all risks resulting from the
builder’s negligence or construction negligence from the builder’s
staff, consultants or agents.
d) Occupiers Liability Insurance – public buildings must be insured against hazards such as collapse, earthquake, fire and floods.
e) Motor Vehicle Third Party Insurance – no one should use a motor vehicle unless it has been insured against damage to the property of third parties.
In addition to these five, Employee’s Compensation (which replaced workmen compensation) is the other kind of insurance policy
that must not only be obtained but also retained in Nigeria. This
policy requires every employer to, within the first 2 years of the start
of the Employee’s compensation act; make a minimal contribution of 1
per cent of what the employee totally earns to the Employee Compensation
Fund. This compensation fund is used to compensate an employee in the
case of disease, disability or injury arising in or out of the course of
their employment.
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