The National Insurance Commission (NIC) has bemoaned the practice where governments sign major contracts with foreign companies and allow the insurance component also to be repatriated out of the country.
According to the commission, Ghana has lost millions of dollars through the practice over the years, depriving local insurance companies an opportunity to grow.
Speaking at a programme organised by the Insurance Institute of Ghana, the Commissioner of the NIC, Lydia Lariba Bawa stated that such actions breach the insurance act and governments should rather be seen enforcing the law.
“I would like to draw attention to the practice whereby in negotiating loans and other funding arrangements for government projects, all the insurances of the said projects are signed away to be effected overseas. Such arrangements breach the insurance acts and leads to the loss of the already scarce foreign exchange,” she said adding that the practice needs to b be reversed to protect local companies.
She recounted that the commission has raised the issue on many occasions but to no avail.
She stated for example that there are countless time when the commission has drawn the attention of state authorities on the breach of the insurance act by signing away the insurance component of project to foreign companies but have received no response.
“As the premiums of such insurances are transferred outside the country in hard currency [we lose]. I’d like to recommend that henceforth all such agreements
be made with due regard to the requirement of the insurance act,” she said.
Espousing the capacity of local companies, Madam Bawa maintained that local insurance firms have the capacity to undertake some of the projects.
She stated that it will be prudent for local firms to be contacted before assertions are made that they lack the capacity to deliver.
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By: Lawrence Segbfia/citibusinessnews.com/Ghana