Thank you NIC for ban on­ motor cover notes

BY: Michael Adomako
Justie Yaw Ofori Commissioner of Insurance
Justie Yaw Ofori Commissioner of Insurance

In recent times, computers, software and applications have led to the simplification of work and the extinction of some other jobs.

We have become better off with these developments in business, health, travel, education etc.

Many companies resorted to telecommunications in the wake of the COVID-19 pandemic.

Technology, indeed, is defined as the organisation of knowledge for practical purposes. The practicability of the knowledge, thus, signifies the time appropriateness of it.

Global services providers like Uber makes use of technology in rendering transportation services that offer convenience and affordability to passengers and drivers.

Mobile money has also made trade, funds transfers and business operations efficient.

No one will doubt the pervasive use and contribution of this incredible way of living. Technology is simply the way to go.


Historically, the provision of laws, market demands and technology have transformed insurance, remarkably; the latter paving the new way to go in the COVID-19 pandemic.

The idea and the use of cover notes (a handwritten company document that contains the details of the policyholder, vehicle and premium paid and terms of cover) was to provide a temporary cover to the motor insuring public.

The use of the cover note afforded the insurance companies the laxity to prepare the main or full motor insurance document (certificate of insurance and motor policy document) for the policyholder.

The motor cover note had been a key document used by the various insurance intermediaries to provide interim insurance cover.

In addition, insurers sometimes used it when they experienced system downtime. The question is: Why give a temporary cover when we can give out a permanent cover ab initio.


The new insurance law, which came into effect this year, Insurance Act 2021 (Act 1061) among other things empowers the regulator, the National Insurance Commission (NIC), to protect the interest of past, current and prospective customers of insurance companies and to chart paths towards growth and development of insurance in Ghana.

Insurance penetration of less than three per cent in Ghana is troubling and affords the sector the alternative and progressive means of making insurance accessible to the wider insuring public.

Thus, the ban of motor insurance cover notes in Ghana, which took effect on September 1, 2021, is welcome.

After a month’s implementation, there seems not to be many issues or challenges.

This is a bold and progressive initiative by the NIC, hinging on innovation and the need for players in the sector to move with the exigencies of insurance practice in these modern times.

The use of the cover note is relatively antiquated and sometimes incites fraud in the insurance service administration and delivery.


Technically and historically, insurance is a contract that needs not be evidenced in writing. Certificates of insurance and the other paper documents are evidence of a contract and not a contract per se.

A contract is made up of an agreement, an intention to create legal relations and consideration. The form or proof of it is purely supererogatory.

We have modernised the practice of insurance by the issue of various documents to avoid ambiguity, needless litigation and to make our insurance provision tangible.

Some superfluous documents like motor cover notes are worth scraping because they are no longer useful and needful. We should let technology lead. Brick and mortar should give way to click and order.


We should welcome this novel initiative irrespective of the minor conveniences of the use of cover notes. That would also help insurers eliminate fraud and accentuate the management of agents and various insurance intermediaries.

It will enable players in the sector to be innovative and efficient. This will clearly become a selling tool for insurers.

Insurers will be able to sell their policies through online portals and other alternative distribution means to serve the public during post working hours, weekends, holidays and by extension to reach untapped territorial areas.

We should soon use USSD codes to insure and pay claims via fast and non-bureaucratic means.

These initiatives will ultimately rope in the needful participation and custom of various policyholders, thus growing our insurance penetration to appreciable levels.

The use of our Motor Insurance Database (MID) for example has helped the law enforcement agencies to readily track insured vehicles and reprimand culprits.

The MID has help reduce the incidence of fake and uninsured vehicles. Motorists now insure on time and with a licensed insurer to avoid untold punitive actions.

Currently, any passenger, driver or road user can check the insurance status of any vehicle by dialing this short code: * 920*57#.

The future is, indeed, information technology. Kudos once again NIC for this initiative.

The writer is a Chartered Insurance Practitioner.

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