NIC to prosecute offenders of Act 724
The Head of Supervision of the National Insurance Commission (NIC), Mr Kofi Andoh, has urged owners of all commercial premises, as well as those under construction to strictly comply to the Private Commercial Building Insurance Law, (Act 724, 2006) in order to avoid possible arrest or prosecution.
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He explained that the commission had already intensified the operations of its task force on compulsory fire insurance to enforce compulsory insurance of private commercial buildings in the country.
In an interview with the GRAPHIC BUSINESS on the sidelines of the launch of the Tigo Income Protection Policy in Accra, Mr Andoh highlighted the need for owners of all commercial premises, as well as those under construction to insure them against fire and other risks as mandated by the Insurance Law.
“Failure of the operators of such facilities to comply with the regulations poses a great threat to individuals who pass by or even patronise their buildings,” he said.
The Private Commercial Building Insurance Law, Act 724, 2006 makes it mandatory for commercial buildings both completed and under construction to be covered by an insurance policy.
The national task force on compulsory fire insurance was inaugurated in October 2014 to enforce sections 183 and 184 of the Insurance Law in compulsory insurance of private commercial buildings.
The task force is responsible for the arrest and prosecution of offenders to ensure compliance.
Low contribution
He said the low contribution of the life insurance sector to the overall growth of the insurance industry indicated that the sector was largely unexploited.
The financial services sector’s contribution to the country’s Gross Domestic Product (GDP), he said, currently stood at about eight per cent with insurance accounting for about two per cent, explaining that the life insurance sector’s contribution to the two per cent was a mere 0.8 per cent, also an indication of extremely low level of life insurance penetration.
While this may look discouraging, Mr Andoh said the flip side of the coin showed that there was a great potential for the development and marketing of life insurance and that required that companies dedicated resources to exploit the potential.
Mr Andoh urged Ghanaians to tap into the potential although it required hard work and dedicated efforts in specific areas. Insurance companies need to be adequately capitalised to enable them write and retain significant levels of premiums, acquire basic operational, distribution and back office infrastructure, and optimize economies of scale.
The head of supervision also added: “Effective governance and risk management systems must be deployed to enable the companies minimise the effect of the environmental and operational risks that tend to militate against their profitability.”
The insurance industry, he said, must continue to innovate to find suitable and cost effective distribution channels that will help reach the underserved segments of the market.