NAICOM Extends Motor Third Party Insurance to W’African Motorist as Consumers Calls for Policy Reversal

Ebere Nwoji

National Insurance Commission (NAICOM), has said that  with the upgrading of the compulsory Motor Third Party Insurance Premium from N5000 to N15000, motorists plying West African countries need not purchase Economic Community of West African States (ECOWAS) Brown Card.

The commission’s latest statement on the compulsory motor insurance premium is coming on the heels of a recent call by the Insurance Consumers’ Association for immediate reversal of the new motor insurance premium policy.

NAICOM’s head Corporate Communications and Market Development, Mr Rasaaq Salami, had told an online medium that the ECOWAS Brown card has been captured in the upgraded premium for Motor Third Party insurance, adding that motorists driving within the West Africa sub-region would not bother to buy  the ECOWAS Brown Card again.

The brown card provides the motorist complete guarantee for a prompt, fair and immediate compensation for any accident he/she may cause outside his habitual residence country.

The cardholder is treated exactly as if the basic insurance policy was underwritten with a company located in the country visited or through which it transits.

Since the brown card is recognised by the government authorities, the motorist is exempted from any other formality relating to the guarantee against the risks of civil liability.

Other benefits from the new premium rate according to the NAICOM’s spokesman include; N3 million claims on damages and limitless life cover for accident victims.

Salami therefore implored Nigerians to embrace the new rate to enable them enjoy benefits that would accrue from it.

He submitted that the new rate became necessary due to the cost of fixing damaged vehicle, stressing that presently, it has become difficult to use N5,000 third party policy to fix an accident with exotic vehicles which cost of maintenance has gone up in recent times.

According to the NAICOM’s directive, from January 1, 2023, premium rate for Motor Third Party Insurance for private vehicles becomes N15,000 as against N5000 previously charged.

NAICOM also approved N3 million Third Party Property Damage (TPPD) limit for private motor; N5 million limit for own goods, with premium of N20,000; staff bus premium, N20,000 and TPPD, N3 million.

But in a swift reaction to this, the Insurance Consumers Association of Nigeria (INSCAN) in a letter signed by its National Coordinator, Yemi Soladoye, urged the commission to reverse the directive.

“We, the Insurance Consumers Association of Nigerian affiliate of the Federal Competition and Consumers Protection Commission of Nigeria hereby write with respect to your Circular No.: NAICOM /DPR/CIR.46/2022 dated 22nd December 2022, increasing the Motor Third Party insurance Premium in Nigeria by 200-400 percent for different categories of Motor Vehicles and by implication giving only one week notice to the insuring public of Nigeria to comply.”

The association demanded that the directive be reversed as it amounts to a deliberate breach of the fundamental principle of the utmost good faith and other decent regulatory principles that guide insurance practice.

The association said its demand for the policy reversal was based on the facts that the commission failed to understand the full implications of the directive which is that it stands as punishment to the Nigerian Insurance Consumers who provide the income that accrued to the entire insurance industry. 

“Though, you threatened to sanction your insurance operators that may fail to comply with your directive come 1st January 2023, yet, the truth of the matter is that your operators and yourself will be the beneficiaries of the windfall that will accrue from the directive while the insurance consumers, are in the real sense of it, the ones being sanctioned, ”the association stated.

It argued that 20 million motor insurance consumers in Nigeria deserved more than one-week notice from the commission.

The insurance consumers said they were not impressed by NAICOM’s corresponding increase in the indemnity limit to N3million querying the commission on the person who requested for the increase to N3million.

“How many claims have you really settled even when the limit was N1 million, are you not aware that the insurance consumers many fleet owners on their own volition do pay extra premium to the underwriters to increase their TPPD Limit to N5million and N4 million, where are the insurance Ratios to justify that premium increase by a whooping 200 percent” they questioned.

The consumers again argued that even at N5,000 MTP Premium, many Nigerians still patronise  fake underwriters not because they  could not  afford the N5,000 but because they did not see any benefit being under genuine insurers’ or  fake cover.

Describing the policy as daylight robbery on innocent motorists in Nigeria, the insurance consumers said the time is now for Nigerian motorists to rise up to the draconian rule.