According to the Insurance Act 2003, receiving an insurance premium will be triggered by a valid contract detailing the conditions of the insurance and that no insurance cover can be issued before payment of the premium (Federal Government of Nigeria, 2003). This implies that payment of the full amount of a premium will precedent a valid contract of issuance of the premium. Partial payment of the premium is not sufficient to demonstrate compliance with the condition (Federal Government of Nigeria, 2003). The insured cannot be held liable if an insurance broker fails or refuses to remit the premium if the premium was paid through the broker. This is so because it is assumed that the money is in the hands of the insurance company after the insured has paid the premium through a broker.
Concerning non-disclosure and breach of contract, Section 55(1) of the Act provides that a breach of the terms of the contract of insurance shall not result in any right by or afford a defence to the uninsured individual except for periods where the term is material and significant to the risk or loss that it is insured against (Federal Government of Nigeria, 2003). Hence not a breach of every term in the contract is capable of providing grounds for the insurance company to avoid any liability. The company cannot repudiate the contract or claim if a breach is summed up as fraud or if the insured has breached a fundamental term or condition of the contract.
Settlement of claims is also covered in the Insurance Act 2003. This is addressed in Section 70 of the Act. (1) states that the 90 day period when the insurer accepts liability to settle the claim begins when the company issues its discharge voucher and not when the insured gives notice of the claim (Federal Government of Nigeria, 2003). If the insurance company does not accept liability, the Act requires that the company should issue a statement in writing to the insured and provide reasons why the company disclaims the liability. If the insurance company does not settle the claim within the 90 days or if it fails to provide reasons why it cannot claim liability within the 90 days, it qualifies as a criminal offense that is punished with a fine (Federal Government of Nigeria, 2003). An insured can bring the criminal complaint against the insurer when the offense is committed. If a discharge voucher is issued but no payments are made within the 90 days, the insurer is free to request a regulatory body to effect the payment of the claim from a statutory deposit of the insurer.
Section 71 of the Insurance Act addresses motor insurance claims. This section provides that for an accident that results in material damage, the insured is not obligated to seek and obtain a police report as proof of damage if there is sufficient evidence that proves the vehicle was damaged (Federal Government of Nigeria, 2003). Statements from eyewitnesses or photographs of the accident are sufficient to provide proof of damage. Nevertheless, if the accident caused death or bodily injury to any person, then the police should be notified of the accident and the insured should obtain a police report. In the event of theft of the vehicle, the insured should also notify the police, who will then issue a report. Without the report, an insurance claim is quite difficult to obtain.
The Insurance Act 2003 maintains that if the insurance company does not settle a claim without providing reasons for doing so or breaches or violates any of the conditions of the Act, then the insured can report the matter to a regulatory commission (Federal Government of Nigeria, 2003). The insured will also be allowed to bring criminal charges or complaints against the insurance firm for any of the offenses covered in the Act. Due to the technicality of the dealings relating to insurance, it is advised that an individual should seek legal advice before taking any action.
Compulsory insurances are insurance policies that every individual is required to have or risk prosecution or penalties for default. From the 2003 Insurance Act, six insurance policies are recognized as being compulsory by the law. They are compulsory under their enabling laws and a violation of the policies is a criminal offence and can result in a civil suit. These policies are the motor third party insurance, employee group life insurance, healthcare professional indemnity, insurance of public buildings, insurance of buildings under construction, and employers liability insurance.
The motor third party insurance is the minimum insurance that motor vehicle owners are required to have for the vehicles they have on the road. This policy covers liability for death or bodily injury inflicted upon a third party during the use of the vehicle. Failure to have this insurance is a criminal offense and non-compliance can result in jail term of up to one year or a fine or both (Federal Government of Nigeria, 2003).
Health care professional indemnity requires that all healthcare professionals must have a professional indemnity policy. The health care provider in this case as recognized by the law is any registered private or Government practitioner and health center, hospital or maternity center (Federal Government of Nigeria, 2003).
The employee group life insurance policy requires that every employer with a workforce of five or more employees needs to take out a life insurance policy for a minimum of three times the sum emolument of an employee. This provision is upheld in both the private and public sectors and non-compliance can be punished with a prison term for up to a year or a fine or both.
The insurance of public buildings policy requires that the owner of a public building or occupier to be insured against liability or damage to property due to force majeure, collapse or fire (Federal Government of Nigeria, 2003). A public building in this case is one where members of the public have access to for various purposes such as education, recreational, commercial, and medical activities. Non-compliance with the policy can result in a hefty fine or a year in jail or both.
Insurance of buildings under construction provides that an owner or contractor of a building under construction with two or more floors to take out an insurance policy that will cover liability that can result from construction risks. These risks are as a result of his negligence or that of his consultants, servants or agents that can lead to death, bodily injury or damage to property to on-site workers or the public (Federal Government of Nigeria, 2003). Buildings that collapse during construction are covered in the policy. Non-compliance with the policy can result in a hefty fine or a year in jail or both.
Employers liability insurance policy requires that every employer should make a 1% minimum contribution from the total monthly payroll of their employees to the Employee Compensation Fund. The Fund is used to provide compensation to employees and their dependents for any injury, death, disability, or disease that may arise in the course of their employment.
List of References
BIBLIOGRAPHY \l 1033 Federal Government of Nigeria. (2003). The Insurance Act 2003. Lagos: The Federal Government Press.
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