Enforcing Compulsory Insurance Regulations

Enforcement of the six compulsory insurances, as stipulated in the regulations that guide the sector, is one of the greatest challenge of the insurance  industry. Ebere Nwoji reports that the Nigeria Civil Aviation Authority has set the ball rolling through recent announcement of plans to enforce regulations by grounding erring airlines

Recent media reports on the Nigeria Civil Aviation Authority’s  (NCAA) plans  to enforce regulations on insurance by grounding  defaulting  air carriers and service providers that do not abide by the rules is a cheering news and one worthy of emulation by various agencies of government and trade groups whose members are mandated by law to put insurance cover in place before operations.

Insurance stakeholders said it was a cheering news  because the issue of enforcement of various compulsory insurances  and the consequences of failures by the concerned authorities has become so glaring in Nigeria now  that the need for maximum support of  the regulatory  agencies   is crucial.

The stakeholders said the reason the enforcement of the various compulsory insurances in the country has not been effective is because agencies regulating various sectors of the economy which required compulsory insurances do little or nothing to enforce compliance.

Indeed,  sectors concerned with compulsory insurances have left the enforcement to the National Insurance Commission(NAICOM) alone with little or no efforts of theirs to compel various operators under their purview to comply.

They cited example of Motor Third Party Insurance policy which has received fair share of public abuses saying the extent of abuse of this particular policy now requires   all hands to be on the deck to ensure thorough enforcement.

According to the insurance industry stakeholders, laws that will empower the ministry of transport, transport unions in collaboration with the law enforcement agencies and other federal and state transport management authorities should form part of amendment of the new insurance bill before the National Assembly so that these bodies will put hands on the deck to ensure strict compliance.

This, they said, would  go a long way to checkmate abuse of the policy and violation of the law.

According to them, fakers of the Motor Third Party Insurance have over the years thrived in their business mainly because enforcement has been left to the police alone. They added that motorists who prefer to obtain their insurance certificate through fake certificate hawkers have been bribing their way through police without checks by other relevant transport agencies.

The stakeholders therefore said the ministry of transport and other relevant agencies on road transport and even the Nigerian Union of Road Transport Workers should synergise  to ensure effective enforcement of Motor Third Party Insurance policy. According to them, these bodies should emulate what the NCAA is about doing to airline operators and arrest motorists without genuine compulsory Motor Third Party insurance, impound such vehicles to serve as deterrent to other motorists.

They said a situation where police will stop a motorist without insurance and collect N100 from him and allow him to go will not guarantee effective enforcement of the compulsory  Motor Third Party insurance.

They also said though the Nigeria Insurers Association’s Insurance Industry Data base  has to some extent reduced the number of motorists patronising fake insurance certificate buyers;  there is the need to use force and compel motorists to buy their compulsory insurance from genuine insurers rather than allowing them to buy wherever they choose.

NCAA Demands for  compliance

Recently, the  Nigeria Civil Aviation Authority (NCAA) demanded compliance with Nigerian Civil Aviation Regulations (Nig. CARs) 2022 on insurance cover to be maintained by all allied aviation services providers.

The directive was contained in an all-operator letter with reference NCAA/DG/AIR/11/16/369 dated August 11, 2023, addressed to all airlines and allied aviation services providers and personally signed by the Director General of NCAA, Captain Musa Nuhu.

The compliance is sequel to the coming into force of Nig. CARs 2022 on July 10th, 2023, which makes it mandatory that all airlines comply with Part 18.14.1.1 of the Regulations.

Specifically, Part 18.14.1.1 of the regulations provides amongst others that, “all airlines and other allied aviation service providers must not operate without adequate and valid insurance cover; submitting to the authority copies of valid insurance certificates, evidence of payment of premium and other policy documents of insurance cover of not less than three months as specified in IS: 18.14.1.1 and having insurance document which must be adequate and renewed before the expiration of the current policy and be submitted to the NCAA as soon as it is renewed.”

NCAA added that non-adherence to the regulation will attract immediate sanctions which will include the grounding of the specific aircraft and taking enforcement action against any airline or service provider that defaulted.

He urged them to be guided accordingly to prevent the grounding of their operations.

The NCAA took the decision despite complaints by airline operators in Nigeria on double insurance premium they pay for purchased or leased aircraft with both international and local insurers which cost they put at N300billion annually.

Need for compulsory insurances

Analysts argued that if NCAA, despite the plight of airline operators, could insist on enforcement of the compulsory aviation insurance on airline operators, nothing should  stop other relevant agencies of government in charge of transport to enforce the Motor Third Party Insurance implementation, given the number of hit and run accident cases recorded in different parts of the country annually.

The need for compolsury insurance cannot be over emphasised. on May 30th, 2022 an unidentified driver hit and killed a 200- level law student of Lagos  State University along LASU-Igando road .

The victim named Oyindamola Togbola was found dead on the morning of the next day being Tuesday.

On February 12,2023, a middle age woman was killed by a hit and run vehicle near Ifo police station on the Lagos- Abeokuta Expressway.

These are but few cases of members of Nigerian public falling victims of hit and run vehicles and where they did survived with injuries,  they were left to care for themselves simply because the motorist who hit them had no insurance cover and where they died, their dependents will be left with nothing because the vehicle that hit them had no insurance cover.

Although the National Insurance Commission had in September 2009 established a body called OSCAR charged with the responsibility of ensuring that victims of uninsured vehicles were compensated, it is not certain how many of these victims were compensated in recent times mainly because many people were ignorant of such body so hardly report to the commission.

This spells the need for thorough enforcement of the compulsory Motor Third Party  insurance, especially now that a huge claim has been attached to it due to increase in premium figure.

Other compulsory insurances yawning for thorough enforcement in Nigeria are Employer’s liability/ Workmen’s Compensation Insurance, Group life Insurance, Health care Professional indemnity insurance, Occupiers liability insurance or insurance of public buildings

These policies have been slated for enforcement since 2009 but their actual enforcement is yet to be achieved. 

A legal practitioner, Barrister Uche Ude has suggested that getting all hands on the deck through legislative empowerment in the consolidated insurance bill with the National Assembly should  be one of the items to be added to the existing bill. This, according to him, will empower all relevant bodies to have the legal backing to take action against erring citizens.