Will VISER Stickers Ever Come?
NAICOM and insurance companies earlier this year introduced VISER and threatened to enforce its use by the end of June. Four months after, Nnamdi Duru wonders how long it will take the industry to provide the stickers to motor vehicle users.
The Nigerian insurance industry has for long lamented over the pains inflicted on it by dealers on fake insurance certificates. Particularly, sales of fake third party motor insurance certificates still booms across the country. Without stress, motor vehicle owners and users alike can obtain fake motor insurance certificates to avoid the prying eyes of traffic officers.
Bulk of Nigerians patronising fake third party motor insurance certificates believe that insurance companies do not serve any useful purpose. They believe though erroneously, that insurance companies do not pay claims, they look for loopholes, mistakes or oversight on the part of the insured in order not to pay genuine claims.
They equate payment of premium for insurance covers as throwing away such monies. Ordinarily, this group of Nigerian would not bother buying motor vehicle insurance covers. They would buy a fake certificate with N500 instead of buying a genuine cover for N1,000 as the case used to be.
Their argument is right to an extent. Some would argue that insurance companies were not collecting an equitable amount from motorist as to make a reasonable impact on the motor insurance pool. Others wonder how these firms would be able to indemnify motorists to the tune of reasonable amounts in cases of accidents on the road when they have collected little or nothing as premium.
Unfortunately for these, government made it mandatory for motor vehicle owners and users to have at least a third party insurance cover while driving on Nigerian roads. And for fear of police apprehension, they revert to buying fake insurance certificates to deceive traffic officers and security agents.
Worried by this age long practice, the Nigerian insurance industry sat down and after much brainstorming, came out with a uniform product to at least minimise the incidence of faking of motor insurance certificates.
The regulatory body for insurance practice in the country, National Insurance Commission (NAICOM) supported by the entire insurance industry came out with Vehicle Insurance Sticker (VISER). This product is meant to create a uniform sticker as evidence of a third party motor insurance cover as against the differrent certificates used by different companies in the times past.
Meanwhile, insurance companies who believed that the N1,000 premium was not equitable to the risk covered under third party motor insurance lobbied the insurance regulatory body to raise the premium rate for the cover. It is statutory for NAICOM to approve the third party motor insurance rates in Nigeria. An approval to that effect was given by the Commissioner for Insurance, Dr. Oladipo Bailey shortly before the product was released into the market.
Late last year, when the industry were sensitising the Nigerian public ahead of the introduction of the product originally slated for January this year, the industry disclosed that NAICOM would on behalf of all insurance companies produce a uniform sticker for this purpose. It added that a provision would be made for the name of individual underwriting firms providing such covers on each sticker.
In the first quarter of the year,VISER was launched in Lagos with fanfare by NAICOM with all insurance firms in the country applauding the development. Insurance operators statedtheir optimism that the product would, if not eradicate faking of motor insurance certificates, reduce the menace to the barest minimum.
This commission raise insurance premium for third party motor insurance to N5,000 for private motor vehicles while own goods carriers and buses were to attract N7,500 per annum on compulsory third party insurance cover. Commercial trucks now pay N10,000 while motor-cycles attracts N1,500 annually on this cover.
The increment became necessary in the course of implementing Section 68 of the Insurance Act 2003 which raised the maximum claim on property damage under the third party motor insurance to N1 million up from N250,000.
However, the N1 million maximum claim on third party motor insurance is in respect of property damage only, it did not include compensation for loss of lives. The section did not alter the position of compensation for human lives as the value of human lives if lost in a motor accident could only be determined by a competent law court as before.
The commission also warned motor users and owners across the country that by June 1, 2004 it will constitute an offence for anybody to drive a vehicle on Nigerian roads without motor insurance sticker placed on it.
Before long, NAICOM supplied about 400,000 copies out of the projected 5 million copies of the stickers to insurance companies across the country. Since then, the regulatory body failed to supply underwriting firms with additional stickers. This ugly development affected underwriting firms negatively while insurance officers were being severally embarrassment following series of failed promises on the delivery of the product to their clients.
This embarrassment prompted Nigerian Insurers' Association (NIA), the umbrella body for underwriting firms operating in the country to declare its readiness to fill the gap created by the NAICOM failure with the supply of VISER.
The Director-General of the association, Mr. Ezekiel Chiejina explained why the enforcement date of VISER had to be put forward. He also promised that by the end of September if the commission was still unable to resolve its logistics problem, NIA would come to the rescue and produce a similar stickers on behalf of its members.
"NAICOM intended the mandatory use of the stickers by all motorists to be effective June 1, 2004. After the initial supply, the commission has not been able to meet the requirement of insurers and we requested a shift of the implementation date. NAICOM agreed and the effective date has been deferred to September 1, 2004.
"We are hoping that the commission will be able to deliver and consistently sustain adequate supply. At the same time, the NIA has agreed the use of VISER was worthwhile. However, we are making alternative arrangement in case NAICOM fails", he said.
Most recently, the logistics problem that stalled the production and supply of VISER stickers by NAICOM was unveiled. A member of NAICOM's Tenders Board blew the lid to the boardroom crisis that stalled the production and supply of VISER stickers to insurance companies.
A section of the NAICOM's board and management levelled accusations of financial misapplication and fraudent inflation of the production cost of VISER to the tune of N550 million against the Commissioner for Insurance, Dr. Oladipo Bailey.
The commission was said to have awarded the contract for the production of 5 million VISER stickers to a London based printing outfit, Rockstone International Limited at N39 per sticker.
The Commissioner was said to have inflated the unit production cost of VISER by N11, raising it to N50 per sticker and as such the contract was said to have been recommended for cancellation before the recent dissolution of the immediate past board of the commission.
Bailey however denied the charges and challenged his accusers to drag him to the Economic and Financial Crimes Commission (EFCC) or the Independent Corrupt Practices Commission (ICPC) if they feel aggrieved and have proofs of their allegations.
"They should get EFCC to arrest me, they can also take me to ICPC. I don't know why the reporter was writing such sensational stories. Does he think this is going to move anybody here. It is not fair at all", Bailey said.
In search of a lasting solution to the boardroom crisis, The Finance Minister, Dr. (Mrs.) Ngozi Okonjo-Iweala invited all the parties to the allegation and counter allegation to answer to the charges.
Before the visitation, it seems the Ministry found the board guilty of not following due process in the award of the contract for the production of VISER stickers.
As these dilly-dallying continues, the insurance industry suffers and reel under the pains inflicted on it by the racketeers, worsened by the ongoing mudslinging in the commission.
This unkept promise further dents the already bad image of the industry, which most Nigerians believe would not keep to its word. Some are wondering how an industry that has not kept its word on delivery of VISER stickers would keep its promise when claims arises therefrom. Their fear is being reinforced by the initial belief that by some that premium paid amounts to wasted resources.
Even NIA that has out of its own volition promised to fill in the gap created by NAICOM's logistic problems or better still boardroom crisis, is yet to deliver. Two weeks after the deadline it set for itself, the insurers' body is yet to deliver on the promise.
The commission has not kept its word after three postponement of the enforcement date of VISER stickers. Before the launching, it said it would be criminal not to have the third party motor insurance stickers on any vehicle on Nigerian road. At the product launch, it put forward the enforcement date to June 2004. After the second failure, the commission in a paid advertorial reassured that it will deliver and enforce the use of VISER stickers by September 2004.
NIA on its part has refused to deliver and at the same time refused to reassure Nigerian motor vehicle users on the availability of the product as it seems NAICOM has failed them. The association is yet to disclose its plans and procedures for meeting the supply even as the clients have waited patiently.
In less than three months, motor insurance buyers who paid various sums as premium for third party cover on their vehicles may have been duped. Motor insurance is one of the general insurance products, which covers usually last for one year. The customers paid the new rate for their present covers and N150 out of the new rate is marked out for the sticker. At expiration of the cover and they had no sticker to paste on their cars, they would have been cheated by the service providers who did not in the first place pay N150 for the stickers they were entitled to.
The implication of the above is that the industry would be reinforcing its notoriety and antagonists would have another good reason to advance their argument against insurance. The image is further dented and effort put into laundering the image of the industry would be set aback by many steps. The industry has continued to lose millions of Naira to the fake insurance companies and printers of fake insurance certificates.
What manner of industry is this? The regulator as well as the regulated would not deliver on a simple promise. Meanwhile, the illicit business persists to the detriment of the industry for as long as the dilly-dallying continues.
The only way forward if for either the Commission or NIA comes out for the last time to reassure the insuring public and ensure that it did not fail this time. If by the end of the year the products were yet to be delivered, those insureds who were not supplied the stickers for 2004 should be given N150 discounts on their accounts with a written apology tendered.
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