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Thursday, December 9, 2021

Nigeria: Withheld Premiums – Brokers Challenge Underwriters On Documentary Evidence

Insurance brokers under the auspices of the Nigerian Council of Registered Insurance Brokers, NCRIB, has charged underwriters to show documentary evidence of withheld premiums from underwriters.

The charge is coming on the heels of growing allegations against brokers by insurers that the high rate of outstanding premiums in their books are as a result of brokers’ refusal to remit some premiums they collected from clients.

President of the NCRIB, Mrs. Laide Osijo who challenged the underwriters to come forward with their evidence said “The allegation is unfounded. We have asked underwriters that have documentary evidence to bring them out, so that we can do reconciliation. That was the advice we also gave the National Insurance Commission, NAICOM.

“The Commission wrote us and we replied by telling them to ask underwriters to show evidences of premiums withheld by brokers. I would not say that brokers do not err, but brokers in the past are different from those practicing now.”

Osijo however said that the council would partner with NAICOM on its planed validation of debts alleged to be owed by brokers.

Osijo, said that the council suggested the idea to validate the debts to NAICOM, adding that brokers in recent time are striving to be ethical and professional and would never engage in anything that would attract sanction.

She said: “We suggested the idea to validate acclaimed debts to NAICOM. The underwriters have been accusing brokers of with-holding premium which is not true. The underwriters often claim that the premiums have been paid and that brokers are with-holding them. But the truth is that most of the premiums are receivables that are not yet collected, especially government accounts. Because the debit notes are written by brokers, it is assumed that the money is with brokers.

“The allegation is unfounded. We have asked underwriters that have documentary evidence to bring them out, so that we can do reconciliation. That was the advice we also gave NAICOM. The commission wrote us and we replied by telling them to ask underwriters to show evidences of premiums withheld by brokers. I would not say that brokers do not err, but brokers in the past are different from those practicing now.”

“Brokers of these days are afraid of being sanctioned; hence, they abide by rules. So we are trying to practice professionally and ethically these days, and I can boldly boast of that. Why would anybody accuse somebody for no just cause? It is unfair.

“If it is possible underwriters can go to the insured to confirm if the premiums have been paid, instead of accusing brokers unjustly. But that may be going to the extreme for there is no contract between the insured and the underwriter. Since we bring the business, we should be allowed the freedom of contract.”

She said NCRIB would collaborate with NAICOM at all level to validate the claims of underwriters to stem the allegation that brokers hold back underwriters’ premiums, stressing that there should be proper documentation before laying an accusation on a broker.

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