INSURANCE ISSUES: ‘Foreign insurers responsible for Associated Airlines crash claims’

                          

According to Punch, Foreign insurance and reinsurance firms will be made to take responsibility for the claims emanating from the ill-fated Associated Airlines’ aircraft that crashed in Lagos last week, investigation has revealed. Although Associated Airlines said the aircraft had an insurance cover before the unfortunate incident, our correspondent learnt that the plane was directly insured by a foreign insurance company instead of passing through a local underwriter.

This, according to experts, violates the Local Content guideline for the insurance sector, which states that such risks must be insured with a local insurance company with only aspects, which cannot be insured locally taken outside the country. When such insurance is done abroad, it was gathered, local insurance industry regulators may not be able to intervene in claims disputes that may arise.

The immediate President, Chartered Insurance Institute of Nigeria, Dr. Wole Adetimehin, said, “According to the local content policy of the National Insurance Commission, any aircraft operating in the country must first be insured with a local insurance company until the local capacity is exhausted. After this, the firm must take permission from NAICOM before taking the remaining risks abroad.”

Also confirming the law, the Managing Director, NEM Insurance Plc, Mr. Tope Smart, explained that the local content policy was aimed at developing local insurance capacity in the sector.

“Any aircraft must first be insured with a local insurance company before taking the remaining risks abroad, according to the local content guideline,” he said.

Over the years, insurance claims from plane crashes in the country have generated controversies as settlements from such losses had always been unnecessarily dragged or victims unpaid.

Meanwhile, the Managing Director, Niger Insurance Plc, Kolapo Adedeji, has said that the security crisis in the country caused by terrorism has driven up insurance claims and eroded the profitability of insurance companies.

He stated that insurance firms were settling more claims on account of terror attacks on insured persons and assets.

At a workshop on emergency response and counter-terrorism in Abuja on Tuesday, Adedeji lamented that insurance companies now spend more money on security gadgets and private guards to secure physical assets.

Source: Punch