Chiamaka Ajeamo,[email protected]
The menace of fake motor insurance certificates has become a major concern for all stakeholders in Nigeria’s insurance sector considering that over seven million vehicles ply public roads with invalid insurance papers.
Reports have revealed that many motorists are risking the lives of Nigerians by driving vehicles without appropriate insurance certificates as only about 4.5 million vehicles on Nigerian roads have authentic insurance cover.
The Insurance Act 2003 which guides the business of insurance in Nigeria stipulates seven compulsory insurance policies which every individual must have or face penalties for default, and the motor third party insurance is one of them.
The motor third party insurance stands as the minimum legal insurance requirement every motorist in Nigeria is mandated to have in order to ply any public road, and it also specifies compensation to accident victims. Thus, it is a criminal offence for any Nigerian to drive his or her vehicle on any public road without this form of insurance cover.
Section 68 of the Insurance Act, 2003 states, “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.
Aside the policy covering liability for death or bodily injury to a third party arising from the use of the vehicle, it also covers damage to the property of a third party to the tune of N1 million and the penalty for non-compliance is imprisonment for one year or a fine of N250,000 or both.
Findings from Daily Sun revealed that, due to the compulsory nature of the third party motor insurance policy, many Nigerians have fallen preys to fraudsters who sell fake insurance papers while some, deliberately procure invalid ones from these same fraudsters in unauthorised agencies just to pass various police check points.
Further findings exposed that those who intentionally obtain fake papers from agents, do so as a result of high level of ignorance to the benefits of the policy as well as lack of integrity on the part of insurers to pay claims when the need arises.
In an interview with Daily Sun, the Lagos State Director, Vehicle Inspection Service, Abdul-Hafeez Toriola, said that fake auto insurance is rampant because people fail to patronise the authorised institutions and for motorists who do not buy it themselves, their agents are the ones who obtain fake papers for them.
Toriola disclosed that the primary way to discover if an auto insurance paper is authentic is to log on to ‘AskNIID.org’, a technology driven initiative; Nigerian Insurance Industry Database (NIID), developed by the Nigeria Insurers Association (NIA), to verify the genuineness of insurance certificates especially, the mandatory motor insurance third party policy.
Also, he said people can easily know original insurance policy cover by dialing the code *565*11# whereby they get instant reply.
Commenting on other ways to verify a valid insurance paper he said, “Lagos State Vehicle Inspection Service now uses Automated Number Plate Recognition (ANPR); the use of camera to detect the validity of vehicle documents. We have cameras installed on major roads in the city, once it captures a vehicle’s plate number it checks the documents of the vehicle which includes insurance policy and once it reads a fake insurance, we will get a notification saying no insurance policy. The camera has captured several vehicles with fake insurance papers, for instance out of 20 vehicles that ply the road every day, at least six have fake insurance papers,” he noted.
For her part, the Director-General of NIA, Yetunde Ilori, said that the NIID portal is the only central record of all insured vehicles in Nigeria and to ensure only insured vehicles operate on the roads, the ‘AskNIID’ is used by authorised law enforcement agencies to enforce motor vehicle insurance law.
She noted that with the presence of the NIID, when a motorist obtains motor insurance policy from a licensed insurer, an alert of the validity of the certificate is automatically sent to the policyholder’s phone for confirmation.
Debunking the notion that insurance firms do not pay motor insurance claims, the Head of Non-Life underwriting, AIICO Insurance Plc, Abiola Adegbesan, said that when genuine claims arise from motor insurance policy they are paid because failure to do so on the part of any insurance company, attracts a fine from the regulatory body; National Insurance Commission (NAICOM).
Adegbesan noted that when claims are not paid to policyholders, it is a case of the insured not knowing their rights in claims settlement, which they do not bother to pursue or the policy they purchased is a fake one as most people buy the policy because it is a legal requirement by the law and to avoid been apprehended by the police and other law enforcement agents at check points majorly, and not for the benefits therein.
She declared “AIICO rolls out millions in paying motor insurance claims and that is what we are in business to do, to pay claims to our customers.”
According to an agent who pleaded anonymity, genuine insurers officially charge N5,000 for the motor third party insurance while impostors charge as low as N1,000 to 2,000. He noted that N5,000 is relatively cheap for someone to get a fake policy in a year, adding that even comprehensive motor insurance which is more expensive than third party some insurance agents still do fake for their clients.
He advised that policyholders should get the policy from licensed insurance companies, the right and authorised channels to avoid buying fakes.
The Executive Secretary/CEO, Nigeria Council of Registered Insurance Brokers (NCRIB), Fatai Adegbenro, disproved claims that brokers sell fake insurance policies to clients saying, “there is no way a registered broker will sell fake papers to clients because he is a professional, thus selling fake insurance policy can lead to the loss or cancellation of his license.”
He said most fake agents emanate from licensing offices as registered insurance brokers only engage in genuine businesses.
Adegbenro stated that NCRIB is collaborating with NIA and other government agencies through campaigns and visitations to curb the issue of fake motor insurance by ensuring that people patronise registered, licensed brokers and insurance companies; the legal authorities.