The Nigerian police have begun inspection of autos to implement the legislation on the obligatory third-party insurance coverage coverage, which they are saying is meant to make sure the security of others and supply monetary compensation for damages, accidents, or lack of life within the occasion of accidents coated by the coverage. Nonetheless, with the licensing of the NPF Insurance coverage Firm Restricted two months earlier than the present crackdown on automobile homeowners, analysts mentioned the onus lies on the police authorities to persuade Nigerians that the train shouldn’t be self-serving, reviews Festus Akanbi
For many of final week, there have been expectations that the normally chaotic Lagos roads would erupt right into a battlefield of legislation and desperation as cops, armed with authority and willpower, would descend upon unsuspecting motorists, demanding proof of third-party insurance coverage.
In Akwa Ibom State, the enforcement was led by the state commissioner of police, Mr Baba Mohammed Azare, on February 1, 2025. Reviews mentioned Uyo and its environs had been abandoned, because the police started thorough cease and search, to make sure that motorists within the state adjust to the directive, identical to the opposite states of the federation.
Drivers slammed on their brakes, some frantically reaching for paperwork, others trying reckless U-turns in a futile bid to flee the tightening noose.
For these with legitimate papers, it was a victorious march by way of the barricades; for the unprepared, it was a brutal reckoning – Lagos, like different states of the federation, had as soon as once more reminded its residents that the legislation bows to nobody.
As promised, the Nigeria Police Pressure on February 1, 2025, launched a nationwide enforcement of third-party motor insurance coverage. On paper, this new initiative goals to curb the excessive variety of uninsured autos on Nigerian roads and supply victims of accidents with correct compensation.
Whereas the coverage has been established beneath the Insurance coverage Act of 2003, many Nigerians, particularly automobile homeowners, stay unsure in regards to the particulars and implications of this enforcement.
Regulatory Endorsement
In an announcement launched by the Nationwide Insurance coverage Fee (NAICOM), titled ‘Understanding the Newest Announcement of the Enforcement of Third-Get together Insurance coverage by the Nigeria Police Pressure,’ it was revealed that third-party insurance coverage is the minimal protection compulsorily required by legislation for any automobile on Nigerian roads, whereas Complete Motor Insurance coverage is non-obligatory and advisable.
The assertion reads: “The Nationwide Insurance coverage Fee welcomes the announcement by the Nigeria Police Pressure that, efficient 1st February 2025, there will likely be a nationwide enforcement of Third-Get together Motor Insurance coverage for all autos on Nigerian roads. This transfer goals to make sure compliance with Part 68 of the Insurance coverage Act 2003.
The fee defined that “Third-Get together Motor Insurance coverage is the minimal protection compulsorily required by legislation for any automobile on our roads, whereas Complete Motor Insurance coverage is non-obligatory however advisable and that the aim of each automobile on the highway having Third-Get together Motor Insurance coverage is to make sure the security of others and supply monetary compensation for damages, accidents, or lack of life within the occasion of accidents coated by the coverage.”
Reacting to the announcement, the Chairman of the Nigerian Insurers Affiliation (NIA), Mr. Kunle Ahmed, welcomes the event, noting that it’s a well timed and commendable motion by the Nigeria Police Pressure. He additional emphasised the significance of imposing the coverage to enhance threat administration, trade innovation, and fostering financial progress.
In accordance with him, “The enforcement of third-party motor insurance coverage shouldn’t be solely a compliance difficulty; it’s a very important technique for guaranteeing monetary safety for victims of highway accidents and the automobile homeowners.
“The third-party insurance coverage coverage additionally gives compensation for property harm and medical take care of injured third events, which additional contributes to constructing confidence within the insurance coverage sector.
“The NIA recognises the immense potential of this enforcement to drive constructive change within the insurance coverage trade and the broader financial system. With hundreds of thousands of autos on Nigerian roads, this transfer is predicted to extend the variety of genuinely insured autos, cut back the prevalence of faux insurance coverage insurance policies, and create a extra strong security internet for motorists and highway customers alike,” he remarked.
The Third-Get together Motor Insurance coverage Coverage is offered for a premium of N15,000 per 12 months to personal automobile homeowners, whereas the premiums for industrial autos fluctuate relying on the kind of automobile and it presents policyholders protection as much as N3 million to restore or substitute the property of an harmless third celebration broken throughout an accident. It additionally gives entry to restricted medical take care of any injured third celebration because of the accident.
As well as, it gives monetary compensation to the household of the deceased harmless third celebration within the occasion of dying. Moreover, the Third-Get together Motor Insurance coverage Coverage now consists of third-party motor insurance coverage protection for the automobile if pushed to any West African nation, as per the ECOWAS Brown Card Scheme.
The Controversy
Nonetheless, as policemen take positions at strategic areas on the highway in main cities and cities within the nation, insurance coverage operators are divided in regards to the timing of the continuing train. Business sources mentioned the present inspection might need been triggered by the controversy trailing the licensing of NPF Insurance coverage Firm Restricted as a normal insurance coverage underwriting firm by NAICOM on November 28, 2024, having fulfilled all registration necessities in response to NAICOM.
Critics had frowned on the licensing of a police insurance coverage firm when the federal government in any respect ranges is divesting their possession of companies to personal sector operators. For example, the federal authorities divested from NICON Insurance coverage, Nigerian Reinsurance Company and Niger Insurance coverage. Lagos State Authorities divested from LASACO Assurance, Edo State from Bendel Insurance coverage whereas Akwa Ibom State divested from Anchor Insurance coverage. This being the case, insurance coverage sector analysts argued that to have the Nigerian Police Pressure as a federal authorities company register an insurance coverage underwriting agency leaves an enormous query.
Such critics believed the newly licensed NPF Insurance coverage stands a greater probability in opposition to different insurance coverage corporations for the reason that inspection of autos for third-party insurance coverage is being carried out by policemen on the highway.
This class of trade analysts due to this fact attracts a connection between the licensing of the NPF Insurance coverage firm and the graduation of the final inspection for third-party insurance coverage certificates nationwide.
Additionally they argued that if in any respect there may be any sector the police wish to spend money on, it shouldn’t be insurance coverage which legal guidelines it’s meant to implement however has not carried out as much as expectation through the years as a consequence of compromise with the legislation breakers.
Questions had been additionally raised in regards to the skill of the newly registered insurance coverage agency to satisfy its obligations contemplating the deluge of the automobile homeowners who’re sure to patronise its insurance coverage firm for apparent causes.
“It’s pure for folks to patronise the enforcer of the legislation, a sign that many automobile homeowners are sure to patronise the NPF Insurance coverage firm on the detriment of different operators within the trade,” an insurance coverage analyst mentioned.
Within the view of analysts, this specific coverage is the core space of curiosity of the police in establishing their very own insurance coverage underwriting agency. As such there may be concern that with the newest improvement, the lack of one other class of enterprise by insurers is imminent simply as they misplaced their pension to the Nationwide Pension Fee and Workmen Compensation to the Nigeria Social Insurance coverage Belief Fund (NSITF).
In the meantime, former Managing Director Coronation Insurance coverage, Mrs. Adeyinka Adekoya, mentioned for the reason that NPF Insurance coverage Firm has been given the licence, there was nothing anyone might do.
In accordance with her, the police are the company to implement public compliance with obligatory insurance coverage however so long as it will not mandate the insuring public to insure with its personal firm, nothing stops the agency from working within the open market like different underwriters.
She suggested the police to do the work of enforcement of the coverage which the trade has been craving for through the years as a public servant.
“They need to do the work as if they’re working for Nigeria,” she mentioned.
On the concern of charge slicing, she mentioned NIA final 12 months addressed the issue by mandating that each insurance coverage agency promoting motor insurance coverage passes by way of the Nigeria Insurance coverage Business Database (NIID).
“Everyone would move by way of the NIID platform. As such they’ll’t promote under N15,000.
As policemen proceed to achieve out to all of the crannies of the nation for the enforcement of the legislation on third-party insurance coverage, analysts advise the police hierarchy to make sure there may be ample monitoring of police personnel to keep away from the enforcement being hijacked by overzealous officers who would possibly weaponise the train to extort Nigerian automobile homeowners.
