Accra, July 27, GNA- Parliament will pass the Insurance draft Bill into Law before the end of the year, to regulate the activities of the insurance industry and address the lapses in the existing legislation. The law would also bring Ghana's Insurance and regulatory framework in line with international standards and best practices.
Dr Samuel Nii Noi Ashong, Minister of State in Charge of Economic Planning, announced this at a dinner dance to run off this year's insurance week celebration in Accra on Saturday. He said "It will in addition incorporate the core principles of Insurance Supervision of the International Insurance Supervisors and the highly embraced concept of good governance".
Dr Ashong said the current Insurance Law PNDCL 227 did not provide the National Insurance Commission with the required regulatory framework to enable it to effectively oversee the activities of the industry. He also said the law would provide detail regulations on the determination of the solvency level of insurance companies and establish a structure to deal with companies on the verge of collapse. Dr Ashong said some insurance companies would be required under the law to recapitalize and restructure their operations by separating life business from non-life operations to improve upon their financial capacity. He said, additionally, healthy competition would be created and efficiency improved in the insurance industry.
Dr Ashong said, consequently, plans were under way to end the monopoly of the State Insurance Company over all government businesses and the 'compulsory 20 per cent cession' to all insurance companies to Ghana Reinsurance Company. He said although insurance had become a useful tool for business risk management and social protection, the insurance culture of Ghanaians was still low.
" Most of the people only insure their cars to avoid police harassment and a good number of commercial shops in the city are not covered by insurance," Dr Ashong said. He, however, urged insurance companies to make available suitable insurance products to the public and also respond quickly to the payment of claims to maintain the confidence of the contributors.
Mrs Josephine Amoah, Commissioner of Insurance, called on insurance companies to take advantage of the current stable macro-economic environment to develop their life business. She also suggested the need for insurance companies to introduce products that would meet the demands of the low-income earners. Mrs Amoah was of the view that if the companies put up the right structures, they would be able to mobilize adequate funds from micro-insurance products. She, however, appealed to government and other agencies to offer the insurance companies the needed assistance to develop new areas.