The National Insurance Commission (NIC) is insisting that cancellation of discounts on premiums or call it “Enhanced No Claims Discount” would not increase the price paid by policyholders.
The Commission earlier this month directed all insurance firms to discontinue granting discounts on premiums under the “Enhance No Claims Discount” directive.
According to the NIC, the directive forms part of measures to deal with some unhealthy practices which is believed to be hurting the industry.
Concerns with the directive
However, there are fears that this may increase the cost of premiums thereby pricing out some policyholders. Some argued that for instance if one was now paying GHâ‚µ100 for a 50 per cent discount on a policy, doing away with this practice would definitely increase the premium to about GHâ‚µ200 Ghana.
NIC on concerns
According to the Commissioner of the National Insurance Commission, Justice Ofori there is no way that this would cause an increase because there is a minimum approved price that all the insurance firms should be working with.
He added that “we don’t want what happened in the banking industry to happen to our sector that is why we are taking these steps”.
Mr Ofori was of the view that the directive would result in enhanced benefits for policyholders in the country.
Extension of No claims discount directive
It was initially thought that the directive would only affect third-party motor insurance. But in a new letter to the insurance players, the National Insurance Commission maintained that it covers all classes of insurance products.
Click here to read NIC’s directive