NIC tightens rules on claim payments
Insurance companies that fail to pay claims within four weeks will be fined, the industry regulator, the National Insurance Commission (NIC), has served notice. This measure takes immediate effect.
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It follows the issuance of a new directive on claim management by the commission, directing all insurance companies to respond to claim requests by customers within five days of receipt, communicate their stance on the claim (whether or not it is genuine) within another five days and make payment within a minimum of four weeks.
The Director of Legal Services of NIC, Mrs Emma Ocran, told the GRAPHIC BUSINESS that the new directive was part of efforts aimed at gaining public confidence in the insurance industry.
“The fine (for delayed payment of claim) is high and very punitive, and we are even considering giving some of the money to the claimants to serve as a motivation for more people to report such incidents,” she said on the sidelines of the launch of a partnership between Ecobank Ghana and Old Mutual Ghana to offer bancassurance services in the country.
“It is to ensure that companies settle claims on time and when we say claims, we mean legitimate claims. We realised that many people were not patronising insurance because of the delay in claim settlement and payment. What it means is that, as an industry, people are not satisfied with our services and that is what we want to correct,” she said.
“Sometimes, it takes about two or three years, and even when the company agrees to pay, it can take another one year for them to pay. This is bad and that is why some people are not just interested in our business,” she said.
Growth in bancassurance services
Bancassurance, which started in the country in 2007, involves a bank selling insurance products on behalf of an insurance company.
Currently, 12 banks have signed onto the service with Ecobank being the latest entrant.
Its partnership with Old Mutual Ghana makes it possible for the Ecobank to sell the insuerer’s four products - the funeral or transaction plan, education plan, international travel plan and the credit life policy - to the banks over 800 custimers nationwide.
The credit life policy would make it possible for Old Mutual Ghana, a subsidiary of Old Mutual of South Africa, to underwrite all loans given by Ecobank to its customers.
Executive Director of Domestic Banking at Ecobank Ghana, Mr George Mensah Asante, said the partnership formed part of Ecobank's resolve to become a one-stop shop for financial sector solutions in the country.
As a bank with a wider network nationwide, Mr Asante said Ecobank realised that it could leverage that platform to provide its customers with an added service in the form of bancassurance, a product that was fast gaining currency in the country.
He explained that the choice of Old Mutual over other insurance companies was informed by the similarities in the values and visions that the two institutions upheld.
"In things like this, you do not just partner with anybody. We looked around and found Old Mutual, which is an African giant, a global name and well-respected to bring insurance to the doorsteps of Ecobank customers," he said after the launch.
Mrs Nicolette Hendricks also praised the partnership as one of the best in the country and expressed the hope that it would help produce the necessary results.
She said her outfit would use the initiative to bring insurance products to the door steps of the Ghanaian public.
Gven that Old Mutual is currently the top insurer in Africa and Ecobank Ghana also being the biggest bank, in terms of assest in the country, Mrs Nicolette was confident the two institutios will use thati influence in their to the benefit of customers. — GB