The Nigeria Insurance Association (NIA) on Thursday commended the decision of the Senate to probe into the menace of fake motor insurance policies.
The Director-General of the organisation, Mr Sunday Thomas, made the commendation in an interview with the News Agency of Nigeria (NAN) on Thursday in Lagos.
The Senate, on Tuesday, mandated its Committee on Banking, Insurance and Other Financial Institutions to investigate the issue.
Thomas said although the Insurance Act 2003 spelt out conditions for the registration of an insurance company, yet these provisions were frequently being flouted.
According to the director general, several efforts have been made to tame the activities of fake insurers without success.
“Whereas the official premium for the policy is N5,000, touts charge N2000 or N1000,” he said.
He said that the loss of premium to the activities of insurance racketeers had deprived genuine underwriters of income.
Thomas said NIA had in 2011 set up the Nigeria Insurance Industry Database (NIID) in an effort to stem the activities of touts.
“NIID is a centralised database system, which is repository of all insurance policies underwritten by genuine insurance companies.
“It was designed to address the problem of fake third party motor insurance certificate, which has almost taken over the business of motor insurance in Nigeria’ he said.
He said although NIID was effective, but it was not able to totally stop the activities of the racketeers.
He urged relevant stakeholders to cooperate with the Senate to put an end to the issue.