Consumer Protection Agency rejects 43% hike in insurance; threatens court injunction
The Consumer Protection Agency (CPA) has opposed the 43% increment in insurance premiums by the National Insurance Commission (NIC) with the former threatening a court injunction against the implementation of the new directive by the regulatory body.
The National Insurance Commission (NIC), on January 1, 2023, implemented the new Motor Insurance prices (tariff) which all insurers are mandated to apply.
Among other things, the pricing change is aimed at safeguarding the financial health of car insurance companies, so as to be able to continue delivering value to customers.
Speaking in an interview, Chairman of the Consumer Protection Agency (CPA) Kofi Owusu Hene popularly known as Kofi Kapito, said the NIC failed to engage stakeholders in the sector before deciding on the increment.
According to him, there is no justification for the unfair upward adjustment in insurance premiums, particularly amid the current economic difficulties.
“Broader consultations were not done, if that had been done, they would have reduced the amount that they are asking us to pay,” he remarked.
Further calling on the NIC to withhold the implementation of the 43% insurance premium hike and seek proper consultation and education.
NIC adjusts upwards tariffs for motor insurance
Per the NIC, the upward review of the motor insurance tariffs, is due to the prevailing harsh macroeconomic challenges facing the economy and thus the insurance sector.
In a statement issued by the regulator on November 23, 2022, the Commission stated the upward adjustment in motor insurance tariffs takes effect December 1, 2022 – which was later postponed to January 1, 2023.
According to the statement, the new policy directive affects vehicle owners with post and pre-2020 registered vehicles with premium mark-ups of 36% and 28% respectively.
Additionally, vehicle owners of with minimum Third Party Property Damage (TPPD) and Personal Accident (PA) cover of GHS 6,000 and GHS 7,000 respectively.
