Government’s agencies, insurers to recoup N45bn from counterfeit operators

The Federal Government has revealed plans to work with the insurance industry to recover about N45billion lost to fake insurance operators nationwide, particularly on Third Party Motor Insurance Policy that has been a major challenge to the industry where 90 per cent of insurance papers registered at licensing offices across Nigeria are fake.

To this end, the Federal Roads Safety Corps (FRSC), has concluded arrangement to harmonise its portal with the insurance industry to track about N8.5million registered vehicles with fake Third Party Motor insurance policies or without insurance paper at all in a bid to compel these motorists to get genuine insurance cover.

It was gathered that such collaboration will also be extended to comprehensive motor insurance, where the industry is said to be losing about N10billion yearly, and will be instrumental in the recovery of stolen vehicles in the country, thus reducing the spate of car theft.

Third Party Vehicle Insurance comes at a fixed price of N5,000 for privately used saloons and Sport Utility Vehicles (SUVs), while commercially used vehicles are charged N7,500.

Investigation revealed that the FRSC is currently pushing a bill that is now ready to undergo second reading at the National Assembly.

The bill, which prescribes heavy punitive measure against car owners without the needed particulars, including insurance paper, also stipulates a six-month jail term for offenders or heavy monetary fine or both in a bid to maintain law and order on Nigerian roads.

This, according to a source in the industry, will lead to the enforcement of Third Party Motor Insurance as well as comprehensive Motor Insurance.

The partnership will entail the Nigerian Insurers Association (NIA), and the National Insurance Commission (NAICOM), supporting FRSC to carry out enforcement of this insurance, especially on the federal roads in the country.

Before now, fake insurers have been prevalent, with over eight million fake third party motor insurance papers sold to unsuspecting motorists across Nigeria, thereby depriving both the government and the industry a huge sum from expected premium income.

The FRSC data revealed that there are 12.5 million registered vehicles plying Nigerian roads, with only four million of these vehicles having genuine insurance, translating to 33.2 per cent of the total registered vehicles in the country.
Further investigation revealed that most of the motorists carrying fake insurance papers obtain them at some vehicle licensing offices, under the Vehicle Inspection Offices (VIO).

Confirming the development, the Corp Marshal of FRSC, Boboye Oyeyemi, said most of the vehicles registered in Lagos carry fake insurance papers.

He regretted that the incidence of fake insurance papers at the licensing offices nationwide are on the rise just as the volume of cars on the roads are on the increase yearly, which is supposed to generate more revenue for the insurance industry through the purchase of insurance, but the reverse is the case.

He added that accidents are also on the rise, which is the reason insurance is needed, and instead of getting genuine certificates, motorists would go for fake ones and expect the industry to pay claims when they have accidents.

He advised that obtaining insurance must not be from the vehicle licencing office, as about 90 per cent of insurance certificates being sold there are fake. “Quacks must be eliminated from the insurance industry through the efforts of NIA and NAICOM,” he stressed.

Boboye also noted that there are saboteurs in insurance sector, who are feeding fat from the system, and called on operators to fish them out, and deal with them accordingly.

“If all the 12.5 million registered vehicles around the country are properly insured, you can imagine the income and revolution it will bring to the insurance industry.”

While encouraging the industry to have a link with the FRSC portal to ensure that vehicles registered before, but stolen, are not re-registered through the insurance industry platform, he said: “Once people know that once a vehicle is stolen, it cannot be re-registered, it will reduce car theft.

The regulatory and supervisory agencies must ensure proper enforcement. If insurance is both well designed and implemented, it can have an enormous impact for improving road safety.

“Given this strong alignment, there is an opportunity for the insurance industry to take a leadership role in furthering the cause of safer roads, especially as it stands the risk of compensation in event of crashes.”

Similarly, the Inspector General of Police (IGP), Ibrahim Idris, has urged NAICOM to constitute a taskforce comprising the FRSC, the Nigeria Police Force, and other critical stakeholders to eliminate fake operators.

He added that in Lagos State alone, there are more than 230 fake insurance companies in operation, while the NIA, to constitute a mobile taskforce, which will be verifying the insurance certificates of motorists, adding that the Police is ready to work with the industry if called upon.

There are criminals, who market this fake insurance to commercial vehicle drivers at their parks, garage and bus stops.

The fake insurance papers, it was learnt, are being sold for N300 to N1000, even though the papers carry names of insurance firms that do not exist.

Most drivers, who go for fake insurance, do so not only because it is cheap, but also saves them from the wrath of the law enforcement agents.

With little or no knowledge of the benefits of buying original insurance cover, other uninsured motorists, prefer to settle their way out with law enforcement agents whenever they meet them on the roads.