NIC to expose insurance malpractice - Mrs Nyamikeh Kyiamah
National Insurance Commission : News
to expose insurance malpractice - Mrs Nyamikeh Kyiamah
The National Insurance Commission
(NIC) is to conduct a special audit to expose insurance companies which are engaged in premium undercutting which is affecting their ability to pay claims.
The acting Commissioner of the NIC, Mrs. Nyamikeh Kyiamah, who made this known in Accra Tuesday, warned of dire consequences for insurance companies which would be found indulging in unhealthy market practices.
At a meeting with chief executive officers of insurance companies, Mrs. Kyiamah
said "some of those insurance firms are demonstrating doubtful commitment to the development of our market".
Some of the firms are alleged to show no respect for the rules and regulations of the insurance business in the country and also indulge in premium undercutting, affecting their ability to pay claims.
said another area of concern to the NIC
was the problem of huge outstanding premium debts in the books of the insurance companies.
said the ratio of outstanding premiums to gross premiums rose from 34 per cent in 2007 to 43 per cent in 2008, stressing that "this is a serious matter".
explained that the result of such huge outstanding premiums was the companies' inability to invest, which also negatively affected their solvency position.
said to address some of those problems, the NIC
, apart from its inspection and enforcement activities, intended to work closely with approved auditors to ensure that the internal practices of insurance firms not only complied with the law but also showed a commitment to the development of the industry.
noted that the enforcement of the rules had become more urgent as a result of the expected rapid growth in the oil and gas industry in the country.
As part of efforts to support local insurance companies, she
said the NIC
would design and implement a suitable risk-based supervision model for the Ghanaian insurance industry in line with international best practices.