By Ernest FRIMPONG
Public perception about insurance and the insurance industry in Ghana has not been the best in the past. The negative perception can mostly be attributed to challenges in insurance claims payment.
Insurance companies and the entire industry led by bodies such as the National Insurance Commission (NIC), the Ghana Insurers Association (GIA), and the Insurance Brokers Association of Ghana (IBAG) are working hard and smart to correct this negative public perception.
In the past, challenges in the fair, and prompt settlement and payment of insurance claims could largely be attributed to the selling of insurance on credit until the implementation of the No Premium No Cover directive by the NIC on 1st April, 2014.
Prior to this, a substantial portion of insurance premiums remained unpaid by clients and intermediaries, and thereby denying insurance companies the needed funds to pay claims in a fair and prompt manner.
Today, insurance companies are more than ever and eager to settle and pay claims in a fair and prompt manner.
They are now using claims payment as a form of advertisement in their quest to serve customers better and correct the negative perception. Notwithstanding this, there are third party challenges in the settlement and payment of insurance claims.
For example, the insurance industry relies heavily on institutions such as the Ghana Police Service in the settlement and payment of Motor insurance related injury, deceased, property damage, and theft claims.
The question is, why do insurance companies need the support of the Police to settle and pay claims in a fair and prompt manner? Some relevant provisions of the Road Traffic Act would help us answer this question.
Relevant provisions of the Road Traffic Act
The Police Service is mandated by law to investigate motor vehicle accident cases, and to issue reports indicating, among other things, the driver at fault.
It is therefore stated on the motor insurance policy that the insured must notify the Police as soon as possible of all accidents including theft of or malicious damage to the insured vehicle.
Section 124 of the Road Traffic (Amendment) Act, 2008 (Act 761) deals with the duty of a driver to stop, report an accident and give information or documents to the Police.
The Road Traffic (Amendment) Act, 2020 (Act 1054) amended section 124 of the Road Traffic Act, 2004 (Act 683) to include the provision that where, owing to the presence of a vehicle on a road, an accident occurs which results in the injury or death of a human foetus, the person in charge of the vehicle shall, as soon as reasonably practicable, report the accident at the nearest police station.
Issuance of Police Motor Vehicle Accident reports
The insurance industry relies on the issuance of reports by the Police Service on vehicular accidents in the investigation of claims, determination of liability, and settlement and payment of claims.
It must be noted that the issuance of reports by the Police is fraught with a lot of challenges, including delays in the issuance of the reports and the high cost one has to expend in securing such reports.
The role of Police Motor Vehicle Accident reports in insurance claims
When a motor insurance claim is filed with an insurance company, the insurance company needs to establish that the claim is genuine. There is also the need to establish the negligent party or the one at fault.
This is because the negligent party or the one at fault or the insurance company of that person would be held accountable for the accident and the legal liabilities to third parties as a direct result of the accident and the resultant claim or compensation that needs to be paid, including the legal cost and other expenses incurred in investigating, defending and settling the insurance claim(s).
The way forward
The insurance industry, led by the NIC, the GIA and IBAG, need to, as a matter of urgency, engage the Ghana Police Service to agree on modalities for the cost efficient and prompt issuance of Police Reports. This could be contained in a Memorandum of Understanding (MoU) signed with the Police Service.
The modalities may include an allocation of an amount or a portion of the Market motor premium to the Police Service on a consistent basis.
This will help motivate the Police Service to carry out their investigations of accident and theft cases as quickly as possible and subsequently issue their Reports with minimal or no cost to the claimant, and in a prompt manner.
The Police Reports should be done or prepared and issued to requesting persons within a certain timeframe without the need for the requesting persons to follow up.
Conclusion
The cost effective and prompt issuance of Police Reports would go a long way to improve motor claims payments and thereby help in correcting the negative perception of the public about insurance and the insurance industry.
