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Fear grips clients of shut insurance firms
KELVIN EGERUE
(Insurance Editor)
POLICY
holders in the 14 insurance companies whose licenses were withdrawn last Monday
have continued to besiege the affected firms as they seek clarifications on the
fate of their policies.
Many policy holder had immediately swooped
on most of the companies as news of their closure spread.
Mostly worried are those clients who
maintain life policies with such companies, since such policies are usually
long-term contracts with some of them stretching 25-30 years.
Some categories of life policies are so
structured such that they can only be redeemed upon the death of the insured,
mostly accident.
Checks made by Daily Champion at
the head offices of the proscribed companies revealed the presence of clients
who clustered round the gates even as some clinched their insurance certificates
in their hands.
Unfortunately, little or no information
seemed to have been made available to the inquisitive clients as the
liquidators, who have taken over the companies following their closure were said
to be settling down with the handing-over formalities.
It would be recalled that government,
acting through the National Insurance Commission (NAICOM) the supervisory
authority for Nigeria’s over 120 registered insurance houses, had Monday shut
the 14 outfits, accusing them of failure to raise their capital base to the
minimum level of N350 million prescribed under the Insurance Act 2004.
The law which came into effect May 27,
last year, gave nine months for compliance.
NAICOM said 104 firms beat the deadline.
Not even the protests made to the Ministry
of Finance could save the 14 firms found wanting as the government shut the door
against them.
Liquidators were appointed to preside over
the assets and liabilities of the axed companies.
Yesterday too, some Council members of the
National Association of Chambers of Commerce, Industries, Mines and Agriculture
(NACCIMA) were seen complaining about the fate of the association’s policies
with the Marine and General Insurance.
The company’s Chairman Chief J. Akin
George, is a strong member of NACCIMA.
At Amicable Assurance yesterday, a client
who simply identified himself as Mr. Igwe, was complaining about his life policy
with the company, a contract which he said he had serviced for five years.
Reports monitored across the country
revealed a high level of worry on the part of policy holders.
The new Insurance Act which provided the
cover for the cancellation of the companies has allowed for the management of
businesses of dead companies.
Under the NAICOM directives, the appointed
liquidators, many of them lawyers, are to employ the assets of the companies in
knocking off their liabilities.
In terms of exciting policies, the
liquidators are expected to transfer life businesses to any other viable insurer
while the non-life businesses, which usually run on annual basis, are to close
at the expiration of the period.
Such clients will then be given the choice
to go to any other insurer.
The liquidators are not allowed to admit
new businesses.
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