The new capital requirement for insurance companies is likely to be pegged at GH¢50 million. This is according to the Commissioner of Insurance, Justice Yaw Ofori.
Insurance companies are currently required to have GH¢15 million before they can do business in the country.
The proposed increments according to the regulator have been influenced by current developments in the economy and it is also to help insurance companies to absorb industry risk.
Speaking to JoyBusiness after the maiden NIC Chairman’s cocktail with insurance companies, Mr. Ofori however said this would happen after discussions with all the players.
Non-Payment of Claims
As part of measures to boost confidence in the insurance sector, the National Insurance Commission has pledged its commitment to crack the whip on insurance companies which fail to pay claims.
Failure on the part of some insurance companies to pay claims is one of the major reasons some individuals are not motivated to purchase insurance products.
Board Chairman of the National Insurance Commission, Ray Ankrah said his outfit would ensure that claims are not only paid but paid promptly.
He said, “We will weed out bad nuts, those insurance companies who are not doing the right thing, you are on notice. The National Insurance Commission would not hesitate to crack the whip when we find out that where we find that companies are not doing the right thing and are not complying with the rules.”
He said, “ for those insurance companies who do not pay claims, who do not do the right thing, we are serving you notice now because we are coming up to you, we’ll make sure that you do the right thing and if you do not do the right thing, you must as well get out of the industry.”
Micro and Agric Insurance
Mr Ofori said plans to provide insurance for farmers and financiers of agriculture and as well promote access to insurance for the under-served and the low-income earner.
He said, “A very effective way to increase penetration in Ghana is through inclusive insurance promoting. We therefore ask the insurance industry to commit time and money to researching and creating useful and affordable insurance products aimed at the right market.”
The Commissioner said, “In Ghana, about 70% of the population is directly or indirectly involved with agriculture. Majority of these people depend on natural elements, which we all know is highly unpredictable. He says, “Crop insurance and weather index insurance are therefore goldmines that the insurance industry can take advantage of.”
The Commission is looking at collaborating with the Ministry of Food and Agriculture, the Ministry of Environment, Science and Technological Innovation and NADMO in this endeavor.
Mr. Ofori adds that the commission is also working on a database to check insured vehicles in circulation. He says “there will be checks put in place to provide assurance to the public through a Motor database which will be accessible via a mobile phone, to curb fake insurance.” He added that “the input of the DVLA and the MTTD will be solicited, since their involvement is key to its success.”
New Insurance Act
Meanwhile, Deputy Finance Minister, Charles Adu-Boahen, urges the insurance commission to work with the ministry to develop a new Act next year to strengthen the insurance sector.
Mr Adu-Boahen said, “I expect the NIC to work with the Ministry of Finance in 2018 to pass a new Act.”
He said, “The Act should adequately address minimum capital needs, risk-based capital needs, corporate governance, consumer protection and transparency.
He added, “The Act when passed should provide the needed legal environment for the implementation of the best regulatory practices to ensure a safe and sound insurance market that is able to support the government’s economic transformation agenda.”