The National Insurance Commission (NAICOM) has released its latest compilation of complaints against insurance companies, revealing significant disputes across various policy types. According to an analysis by The PUNCH, policyholders have lodged claims worth an estimated N22.65 billion, with group life assurance claims representing the largest portion of the disputed amount.
Breakdown of Complaints
Group life assurance policyholders are seeking approximately N21.01 billion in claims, plus an additional $11,897,019. Life policyholders, who filed the largest number of complaints (over 380), reported approximately N1.145 billion in disputed claims. Motor insurance policyholders also filed complaints totaling N180.24 million, some of which were worth $2.20 million.
According to Investopedia, “Life insurance acts as a financial safety net for your family. If you die while it’s active, your insurance company pays a sum of money to the people you’ve named in your policy (your beneficiaries). This money, known as the death benefit, can help your beneficiaries replace your lost income and cover expenses like housing, food, and utility bills. It is taken out by an individual, while a group life insurance is taken out by an employer of labour.”
Regulatory Context of Group Life Insurance
Employers in Nigeria are mandated to provide group life insurance for their employees under Section 4(5) of the Pension Reform Act (2014). This policy aims to provide financial support to the dependents of a deceased employee, typically providing a payout equivalent to three times the employee’s total annual earnings. Motor insurance provides cover for vehicles plying Nigerian roads; it can be third-party motor insurance, which is currently being enforced by the Nigeria Police; comprehensive insurance, which protects both owner and third party; and then there is Goods in Transit Cover.
Companies with High Complaint Volumes
The complaints data covers a total of 1,571 policyholders who have lodged complaints against 46 insurance companies. IGI recorded the highest number of complaints, with 327 issues reported, some originating as far back as 2020 and 2021. African Alliance Insurance followed with 282 complaints, primarily from annuitants, which is expected given that NAICOM sacked its board and management in October and appointed an interim board for the firm. Standard Alliance Insurance also faced a high volume of complaints, with 229 policyholders filing grievances.
In contrast, Stanbic Insurance had the lowest number of complaints, with only one reported. Heirs Life also had a low number, while emPle General, FIN Insurance, Mutual General, Starling Assurance, and Tangerine General each recorded four complaints.
NAICOM’s Stance on Claims Settlement
NAICOM has expressed a zero-tolerance policy for the non-payment of valid claims, stating that such practices undermine public trust in the insurance sector. At the 2024 Insurance Directors Conference, Commissioner for Insurance Olusegun Omosehin emphasized that failure to settle claims promptly could result in the loss of an insurer’s license. He stated, “Unnecessary delays in the settlement of claims will no longer be tolerated. Let me make clear this provision that ‘non-payment of claims is a ground for cancellation of license. As a commission, we are committed to strictly enforcing the law and taking swift action against any insurer failing to meet their claim obligations. Simply put, if a company cannot honour legitimate claims, it has no place in our industry.”
