Consolidated Insurance Bill: Fraudsters face N5 million fine, imprisonment
Troubles await insurance policy peddlers, especially those selling fake third party motor insurance policies if the Industry Consolidated Act becomes operational. Defaulters would face a fine of N5 million or two years imprisonment for transacting underwriting business without a license.
Currently, the racketeers are largely in control of motor insurance, issuing fake insurance papers to about 10 million customers in the country.
To address the menace in the industry, the Consolidated Bill states that any person who transacts insurance business without being licensed for the purpose commits an offence and is liable on conviction, in the case of a company or other combination of persons, each principal officer of the company, firm or other combination of persons responsible, is liable to a fine of N5 million or imprisonment for a term of two years: or an individual, to a fine of N1 million or imprisonment for a term of two years.
The bill notes that persons who transact business as an insurance agent without having been licensed commits an offence and is liable on conviction to a fine not exceeding N250, 000 or to a term of imprisonment not exceeding six months or to both fine and imprisonment.
“In addition to subsection (10) of the section, the court may make an order requiring the person to refund any sums collected by him, while so transacting the business, to the rightful owners or other entitled persons,” it says.
Speaking on the law, the Director-General, the Nigerian Insurers Association (NIA), Mrs. Yetunde Ilori, said the association had intensified awareness on the menace of fake insurance papers, adding that the association had also continued to educate insurance companies on the need to upload their motor policies on the Nigerian Insurance Industry Database (NIID).
She noted that about 2.5 million vehicle insurance policies have been uploaded on the NIID, stressing that the NIID platform remains one of the best ways to curb fake motor insurance policy. She added that to help vehicle owners easily verify the genuineness of their policies, the insurance industry introduced the Unstructured Supplementary Service Data (USSD) code *565*11#.
According to her, awareness on the usage of USSD code *565*11# is gaining ground as people daily rely on it to settle issues bordering on the genuineness of their policies.
Former Chairman of the NIA, Tope Smart, said the code initiated by the NIA would help bring insurance closer to the people and ultimately eliminate fake insurance certificates in the market.
He explained that in 2010, the association took a major step towards eliminating fake insurance certificates through the inception of NIID, stressing that the database went live in 2011 and that insurance policies obtained by motorists could be checked real-time online on the Internet and through dedicated devices.
He said the objective of the NIID is to serve as an authentic database of the Nigerian insurance industry data providing qualitative statistics/analysis of the industry data.
Smart posited that the industry has continued to reap the benefits of the scheme, adding that before the establishment of the platform, cloning of insurance certificates was a thriving business.
He said: “The NIID platform had been operational nationwide, but with challenges in verification in areas with poor internet coverage. Verification of motor certificates through the dedicated devices became highly impaired due to the vicissitudes of internet operations in the hinterlands. This led to the introduction of the USSD technology.
“The USSD is a Global System for Mobile Communication (GSM) technology used to send text between a mobile phone and an application programme in the network. It works independently of Internet connectivity. In this instance, any mobile phone (not necessarily a smartphone) can communicate with the NIID system to retrieve policy status whenever required.
“It is hoped that with the USSD, we would have fully overcome the problems associated with the dedicated devices as it guarantees uninterrupted service throughout the country and on all networks.”