Today marks the last day before the closure of the window for insurance to be taken on credit.
This follows the full implementation of the No Premium, No cover policy that will kick start tomorrow, April 1, 2014.
From tomorrow, no insurance company will be able to provide insurance cover to anyone who does not make an upfront payment.
The directive comes on the back of concerns raised by some stakeholders of how some huge amounts of underwritten cover have to be written off their books because clients have failed to pay for them.
Commissioner of the National Insurance Commission, Lydia Bawa tells Citi Business News the policy will also significantly enhance confidence in the insurance industry as her outfit will no longer take excuses for failure of insurance companies to pay claims.
“Policy holders owe the insurance companies to the tune of about GHS 130million. You know, insurance is not like banking- we pay claims. When there is for example 10 cedis of premium, when there is a claim, we can be asked to pay 100 times that amount. The only way we are able to do that is when we are able to mobilize the funds and invest, and then we can be able to pay claims.”
“But because we underwrite on credit, insurance companies are cash-strapped and have liquidity problems. And then the public turns round and say there is no confidence in the industry” she added.
According to the Lydia Bawa “when there is a claim, we at the commission will ensure there is no excuse for not paying the claim as long as it is a legitimate claim.”
By: Kwaku Anim Boadu