By Enyichukwu Enemanna
Nigeria’s insurance regulatory agency, the National Insurance Commission (NAICOM) has issued a new directive raising the premium rate for third party motor insurances policy expected to take effect from January 1, 2023, the commission announced in a circular dated Dec. 22.
The circular conveying the new policy was signed by the Commission’s Director, Policy and Regulation, Leonard Akah on behalf of the Commissioner for Insurance.
It came after several attempts made by the industry’s players to review the rate at industry committee meetings since 2021.
The stakeholders agreed on September this year as the deadline for the announcement of a new premium rate, an announcement that was delayed.
In the new directive, private vehicles which before now paid N5,000 premium for N1m Third Party Property Damage (TPPD) limit, are now to pay an N15,000 premium for N3m, while owner-good vehicles are to pay N20m premium for N5m, and staff buses are to pay N20,000 premium for N3m.
Third party motor insurance is one of the compulsory classes of insurance and the most popular among the six compulsory insurance policies stipulated by the Insurance Act 2003.
The circular read: “Pursuant to the exercise of its function of approving rates of insurance premium under Section 7 of NAICOM Act 1997, and other Extant Laws, the commission hereby, issues this circular on the new Motor Insurance Premium rates effective from January 1, 2023.”
It continued, “For commercial trucks and general cartage, they are to pay N100,000 premium for N5m TPPD limit; tricycles N5,000 for N2m TPPD limit, and motorcycles N3,000 for N1m TPPD limit.
“While for a comprehensive motor insurance policy, the premium rate shall not be less than five percent of the sum insured after all rebates and discounts.”
The commission noted that failure to comply with this circular shall attract appropriate regulatory sanctions.
