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…How to recover claims, benefits
From Adanna Nnamani, Abuja
Policyholders of the eight insurance companies whose operating licences were revoked by the National Insurance Commission (NAICOM) for not scaling the recapitalisation hurdle are panic-stricken over fears of losing their investments.
Some of them ranted on social media, while some are waiting impatiently for announcements by the regulator, NAICOM.
However, experts note that all hope is not lost as affected customers can tread official paths to protect their interests and recover valid claims, premiums and other benefits owed to them.
The affected companies are; Staco Insurance, Goldlink Insurance, Universal Insurance, Nigerian Reinsurance Corporation (Nigeria Re), NICON Insurance, African Alliance Insurance Plc, Nigerian Agricultural Insurance Corporation (NAIC) and Royal Exchange Prudential Life Plc.
The companies lost their licences after failing to meet the recapitalisation requirements set by the insurance industry regulator.
NAICOM had announced that 50 out of the 58 insurance companies operating in the country successfully met the recapitalisation requirements, leaving eight operators unable to continue with their businesses.
The affected companies have subsequently been handed over to liquidators, who are expected to take control of their assets and liabilities and manage the process of settling legitimate claims owed to policyholders and other creditors.
The development has raised concerns among thousands of policyholders, particularly customers with life insurance policies, savings-linked products, annuities and other long-term contracts.
For many policyholders, the immediate concern is whether their money is safe, how they can make claims and whether they need to continue paying premiums.
Insurance experts advise customers of the affected companies not to panic but to obtain proper information and follow the instructions issued by NAICOM and the appointed liquidators.
Under the liquidation process, valid outstanding claims become liabilities of the failed insurance company. The liquidator is expected to verify claims and realise the company’s assets to settle eligible obligations in accordance with the law.
For general or non-life insurance policies, policyholders should establish the status of their policies and any claims arising from risks that occurred before the licence was revoked. Such policies generally do not continue as normal once an insurer loses its licence, meaning affected customers may need to make alternative arrangements for insurance cover.
This is particularly important for motor, property, marine, travel, liability and other forms of general insurance where allowing a policy to lapse without replacement could leave the policyholder exposed.
For life insurance policyholders, the situation may be more complicated because some policies run for several years and may involve accumulated savings, surrender values, maturity benefits or death benefits.
The liquidator will determine the amount payable based on the terms of the policy and the value of the liabilities established as at the relevant date.
Policyholders with outstanding claims are therefore expected to submit their documents and evidence to the appointed liquidator. These may include policy certificates, claim forms, premium payment receipts, bank statements, identification documents and correspondence previously exchanged with the insurer.
Customers should also keep copies of everything submitted and obtain acknowledgement of their claims where possible.
Another important step is to avoid making payments to the defunct insurance companies unless such payments are specifically authorised by NAICOM or the appointed liquidator.
Policyholders should also be cautious of individuals claiming to be agents of the liquidator and demanding unofficial payments to process claims. Any instruction relating to claims, premium payments or settlement should be verified through official channels.
The liquidation process is expected to involve the identification and realisation of the companies’ assets, including statutory deposits and other recoverable assets, which will be used to meet verified liabilities according to the applicable legal order of priority.
However, policyholders should not assume that every claim will be paid immediately or in full. The actual recovery will depend on the value of assets recovered, the volume of legitimate claims and other liabilities of each company.
The collapse of an insurer can also create uncertainty for insurance brokers and other intermediaries, as customers often turn to them for clarification on the status of their policies and claims.
The latest development is part of the wider restructuring of Nigeria’s insurance industry following the recapitalisation exercise, which was designed to strengthen the financial capacity of operators and improve their ability to meet obligations to policyholders.
Meanwhile, A & G Insurance, which previously operated a composite insurance business, reportedly retained its general insurance business after losing its life insurance licence. The development means its life policyholders will also need to establish the status of their existing policies and claims under the regulatory arrangements.
For customers affected by the latest licence revocations, the immediate priority should be to establish the status of their policies, submit all valid claims, preserve documentary evidence and monitor official communications from NAICOM and the appointed liquidators.
Policyholders should also review their insurance needs and obtain replacement cover from properly licensed insurers where their previous policies are no longer active.
The key message for affected customers is that the loss of an insurer’s licence does not automatically mean that all outstanding claims disappear. Valid liabilities remain subject to the liquidation process and will be considered for settlement from available assets in accordance with the law.
However, customers should act promptly rather than wait indefinitely, particularly those with matured life policies, outstanding claims or policies covering risks that require continuous insurance protection.
