By NIKE POPOOLA

More than 60 per cent of Nigerian motorists are said to be in possession of fake insurance certificates. NIKE POPOOLA writes on efforts by the National Insurance Commission to bring an end to the menace.

In the last three weeks, no fewer than 16 providers of fake motor vehicle third party insurance certificates have been arrested by the National Insurance Commission.

The suspects, who claimed to be vehicle insurance operators, sold fake papers at different prices. The receipts they issued, however, had N5,000 or less and carried the names of some licensed insurance companies.

Aside from selling these fake papers to unsuspecting motorists, some fake insurance agents even sell such documents to some officials of the NAICOM, at Area 1 Vehicle Licensing Office, Garki, Abuja.

This helped NAICOM task-force team, comprising armed policemen, insurers and some officials of the commission, to quickly raid their hideouts and arrest them.

The arrested suspects were handed over to the police for further investigations.

Last week, some illegal operators sold fake papers to NAICOM officials for prices ranging between N100 and N1,000, in Kano State. They were also arrested and handed over to the police in the state.

For decades, this worrisome scenario lingered in the country, impacting negatively on both the insurance companies and the insuring public.

The counterfeiting of third party motor insurance certificates subsequently ate deep into insurance companies’ premium, had hindered road accident victims from accessing claims benefits.

As at 2008, 90 per cent of motorists in the country were either unconsciously or ignorantly in possession of these fake papers. However, the figure only fell to 60 per cent in some states in 2010.

The trend prompted NAICOM to restate its commitment to ending fake certificate proliferation by fishing perpetrators out of their hideouts.

The Commissioner for Insurance, Mr. Fola Daniel, therefore saw the arrested illegal operators as fruits of the commission’s efforts. He promised, last week, that the suspects would be arraigned in accordance with the provisions of the Insurance Act.

Daniel said, “The raid will be a continuous process, until the commission gets rid of all those tarnishing the image of the insurance sector.”

According to him, the only way through which motorists can avoid being deceived by these illicit operators is to go directly to any of the branches of insurance companies, their agents or qualified brokers to purchase their motor vehicle third party insurance certificates.

He warned motorists to desist from patronising licensing offices or road side hawkers.

The commissioner assured that NAICOM would not relent in its efforts to stamp out the act of faking of insurance papers, adding that the exercise would soon be extended to other parts of the country.

Motor vehicle third party insurance policy is usually made compulsory in many countries of the world. Motor insurance is also known to have been contributing largely to premium earned from non-life businesses.

In Nigeria, Section 68 of Insurance Act 2003 makes it mandatory for all motorists. Currently, the price stands at a non-negotiable fee of N5,000.

Subsection one states that. “No person shall use or cause or permit any other person to use a motor vehicle on a road unless a liability which he may thereby incur in respect of damage to the property of third parties is insured with an insurer registered under this Act.”

Subsection two states, “The insurance taken out pursuant to subsection (1) of this section shall cover liability of not less than N1m.”

Section 3 adds, “The insurance under this section shall be in addition to the liabilities required to be insured under the motor vehicle third party Insurance Act 1950, and shall be regulated by the provisions of the Act.

Subsection four prescribes the punishment for law breakers, “A person, who contravenes the provisions of this section commits an offence and liable on conviction to a fine of N250,000 or imprisonment for one year or both.”

The Managing Director, Standard Alliance Insurance Plc, Mr. Tom Imokhai, gave kudos to the recent efforts by the NAICOM to raid sites belonging to touts and fake insurance agents.

The Standard Alliance boss lamented that the activities of the fake operators had been having devastating effects on the industry. He noted that though this action was long overdue, further arrests of the suspects would be a lesson to their collaborators.

He added that it would also help to redress the negative perception, which the industry had earned over the years, due to the activities of the fake insurance agents.

He noted that often, drivers had thought that they were covered, only to be surprised that they could not have access to claims benefits.

To the Managing Director, Linkage Assurance Plc, Mr. Gus Wiggle, fake certificates spread to most parts of the country because insurers were far from many areas.

He said, “My own personal belief is that we have not taken insurance to the people that needs insurance products. We are too far from them. The reason is that if we are there with them, there will be no need for fake insurance.”

According to him, because most motorists do not know the consequences, they purchase fake certificates the way they purchase fake drugs because they cannot get the original certificates to purchase (just like the original drugs).

He explained, “If we take insurance to them, people will begin to see the effect fake insurance is doing to them. At the end of day, with fake insurance, they will be spending twice the amount they would have spent in getting original insurance.”

If anything happen to them, he said, they would not be covered, despite the fact that they might have spent some money to purchase fake papers.

The Chairman, Nigerian Insurers Association, Mr. Ladipo-Ajayi, also warned motorists against using fake certificates.

He said, “Fake insurance certificate will affect many people because if you create a problem and damage another person’s car or you injure anybody, you may not be able to restore the loss, and no insurance company will stand in the gap for you.”

Ladipo-Ajayi stressed that the law compelled all motorists to have a minimum of third party motor insurance certificates to ensure the safety of all road users.

With genuine insurance certificate, he explained, if a person hit another car, he would only have to report the case to his insurer, who would bear the liabilities on his behalf.

The Managing Director, Goldlink Insurance Plc, Mr. Femi Okunniyi, advised motorists to promptly report any accident to their insurance companies for the claims settlement procedure to begin.

He noted that while the third party motor insurance would cover liabilities for damage done to the third party, comprehensive insurance would cover both the owner’s car and the damage done to the third party.

Okunniyi explained further, “Documentation is very important in claim. You don’t just say you have a claim; you must be able to prove that you suffered a loss. If some of these documents don’t get to the underwriters on time, they may not be able to look into the claims and be able to settle promptly.”

Source: Punch