Following Nigeria’s successful move to a ‘no premium, no cover’ policy, the National Insurance Commission (NIC) of Ghana is set to implement a similar approach, prohibiting the sale of insurance policies on a credit basis. The new policy will come into effect in April this year.
The decision comes in the wake of poor management and the inability of companies to pay their claims in a fair and prompt manner. The new approach will better enable insurance companies to invest funds appropriately, make adequate provisions for claims and fulfill the promises they make to policyholders.
“Insurance companies are to collect their outstanding premiums from policyholders or write them off as bad debt before December 31, 2014,” commented CEO of the NIC, Lydia L. Bawa, according to the Institute of Financial and Economic Journalists.
She was speaking at the inauguration of the North Ridge branch of Essien Swiss International Capital Holding (ESICH) Life Assurance office in Accra.
The NIC will soon release guidelines on the implementation of the no premium, no cover policy and the payment of claims for the insurance market, said Bawa, adding that the approach would improve public confidence in insurance firms.