The National Insurance Commission, has instructed all Insurance companies that underwrite Motor Insurance to halt the issuance of Manual Motor stickers with effect from today, the 20th of January 2020. In a letter to Non-Life insurance companies and Insurance brokerage firms, the NIC instructed that with effect from 20th January 2020, it is illegal for any non-life insurance company to issue the manual stickers, and these companies have up until 24th January 2020, to return any manual stickers in their custody to the commission.
The NIC has come up with a central Database called MID or Motor Insurance Database, in which all General Insurance companies underwriting motor insurance are to capture their motor businesses. The move, according to sources, is to curb the prevailing situation where Fake stickers are issued to unsuspecting members of the public.
Aside the cost of these fake stickers to the insurance industry, it has its own traumatic effect on those who fall prey to it, as most clients find these stickers to be fake at the time of making a claim, leading to needless delays and frustrations.
It is believed that this system will streamline the issuance of stickers, and also help the regulator with their monitoring efforts.
In its full implementation, the The Motor Insurance Database would also be available to security agencies and the general public including passengers of commercial vehicles who can check the validity of an insured vehicle on the spot. These checks are expected to be done with a mobile app and or QR Code. The NIC is collaborating with all stakeholders to ensure the smooth running of this Project.
There is also the other side of the centralized database – checking of rating and undercutting. With the outdooring of this central database ran by the regulator from a central point, they will also have an eye on the figures these insurance companies are churning out. Are they rating right? Are they giving needless discounts? basically, the NIC will directly have an eye on the figures to ensure that insurance companies are charging the right premium.
Motor Business is the single largest class of business underwritten by Non-life Insurers in Ghana. Most of claims that hit companies are also from this class of business. It is believed that if insurance companies rate well and charge right, they will have enough funds at their disposal to pay genuine claims promptly.
Of the many tariff regimes that have been flouted, this latest move by the regulator is expected to be the most foolproof to date. Clients should brace themselves for a new regime of little or no discounts and tighter rating metrics.