The electronic Motor Insurance Database (MID), which will house all information on motor insurance policies in the country, will prevent companies from under-pricing their insurance policies, the Commissioner of Insurance, Mr Justice Yaw Ofori, has said.
He said the issue of under-pricing was a burning concern for the commission because if companies sold their policies cheaply, they would not be able to pay genuine claims when they were due.
Addressing the media on the introduction of the MID, he said:
“The law allows us to come out with a minimum premium but what we have realised is that because of competition companies were underpricing and selling below the minimum allowed and this results in delays in the payment of claims or non-payment of claims.
“With this new system that we have in place, when you underwrite and you sell below the minimum required and approved by the commission, you cannot issue the stickers.
“We want to protect the interest of all parties and build a stronger insurance industry.
There are approved rates that should be applied by all the companies and we will enforce it now that we have the database.”
“We have a system now that will not allow companies to do what is not right and if any company fails to comply, there will be sanctions,” he added.
Mr Ofori pointed out that the NIC begun the implementation of the MID policy on January 1, 2020, but gave all the insurance companies up top January 20, 2020 to migrate all their information unto the new system.
He said the system, among other things, was aimed at solving the problem of fake motor insurance stickers in the country.
Mr Ofori noted that upon the purchase of a valid motor insurance policy, the insured would receive a text message confirming that the policy was authentic.
Members of the general public can also verify the authenticity of a motor insurance policy of the vehicles they are boarding by dialling a USSD code.
The MID also comes with electronic motor insurance stickers with QR Codes which are generated from the MID Portal.
The QR code can be scanned with a QR code reader to verify the authenticity of the sticker and for that matter the insurance policy.
Mr Ofori said the commission had authorized all insurance companies to upload all motor insurance policies issued prior to 20th January, 2020 on to the database.
This is to enable the police and the general public to verify with accuracy the authenticity of such policies.
In the coming days, the NIC in collaboration with the Motor Traffic & Transport Department of the Ghana Police Service will be conducting random checks across the country to ensure effective implementation.