NIC GETS TOUGH WITH PLAYERS IN THE INDUSTRY (SPREAD)

THE National Insurance Commission (NIC) has taken measures to protect Ghanaians from insurance companies which have high lapse rates in paying the claims of policy holders.
The measures include a re-licensing exercise and the requirement of capital of $1 million before new licences are issued to companies to operate in the country.
The Deputy Commissioner of Insurance, Mrs Nyameke Kyiamah, who announced this in Accra yesterday, said market conduct rules and code of practice were in the process of being developed to guide the insurance industry.
Speaking at the launch of the corporate website of Enterprise Life Assurance Company (ELAC) and the presentation of its 2007 accounts, Mrs Kyiamah said the measures, which were embodied in the Insurance Act 742, required joint insurance companies to split into separate life and non-life companies, with proper corporate governance structures.
She said the life insurance market had seen tremendous growth in the last six years, mainly as a result of improvement in the country’s macroeconomic environment and the emergence of appropriate products on the market.
She observed that the separation of life and non-life businesses was expected to raise the growth rate of the life business to higher levels this year.
She said ,for example, that total life premium income grew from GH¢5.2 million in 2001 to about GH¢67 million in 2007.
Mrs Kyiamah said at that growth rate, the life insurance business would soon become a formidable part of the insurance industry in particular and the economy as a whole.
To that end, she said the NIC had taken steps to protect the interest of policy holders to ensure compliance with international standards and best practices.
The Executive Director of ELAC, Mr C. C. Bruce Jnr, said the total assets of ELAC, which included bank and cash balances, rose from GH¢752,875 in 2006 to GH¢1,187,439 in 2007
He said within the same period shareholders’ fund also witnessed an increase from GH¢3,210 to GH5,233, while policy holders’ fund rose from GH3,951 to GH¢7,958.
He said the company had opened a customer service centre via the Internet to ensure transparency, as well as the prompt payment of claims.
Mr Bruce deplored the ascendancy in the activities of fraudsters who presented fake claims for payments.
He said the management had put in place mechanisms, including the use of Information Technology, to protect the investments of policy holders and shareholders.