Graphic Business News

Insurance companies bemoan rising use of fake stickers

By: Ama Amankwah Baafi
Category:
Mr Justice Yaw Ofori — Commissioner of Insurance
Mr Justice Yaw Ofori — Commissioner of Insurance

Some insurance companies in the country have expressed concern about the prevalence of fake motor insurance stickers on the market. 

According to them, in recent times, some unscrupulous persons have been issuing fake stickers to unsuspecting clients, a phenomenon which poses a danger to the growth of the industry.

They also explained that this situation, especially when it comes to claims payment, sends wrong signals to the public because when clients are refused payments, the perception is created that insurance companies do not want to pay claims.

This concern confirms available statistics by the National Insurance Commission (NIC) that an estimated 30 per cent of vehicles in Ghana are plying the roads without insurance.

Impact
In an interview, the General Manager, Operations, at Enterprise Insurance Company (EIC), Ms Ernestina Abeh, said fake insurance stickers and certificates undermined trust in the industry.

She indicated that the insurance business worked in such a manner that “when somebody buys a policy, he transfers a risk to the company with the expectation is that when an event occurs, the company will indemnify.”

Loss of revenue
She said money that should go to the insurance companies ended up in wrong hands because it was only when the companies received premiums that their claim paying ability could improve.

Ms Abeh added that the fake sticker challenge also affected the work of genuine agents and brokers because clients may not trust them.

“It should be a big concern for everybody. Public education should be taken seriously. I am sure the regulator is putting systems in place to address the issue because it is also aware. At the individual and association level, I believe they are working to address this menace,” she said.                                                             

The Chief Executive Officer of Donewell Insurance Company Limited (DICL), Mr Seth Aklasi, said insurance was a pool from which claims were paid “and so if others are buying fake stickers that have been printed but not basically traceable to anybody, companies will not be able to pay.”

He added that fake stickers were cloned and it was only when the claim occurred that those who purchased such stickers would realise that claims could not be made.

“You come over to us and we tell you that we didn’t sell the sticker to you and so we can’t pay, and that also gives the insurance companies a bad name, and that is a big challenge,” he said.

“I urge Ghanaians to avoid patronising this unlawful stickers and also plead with the regulator to use all channels to fight this scourge and sanitise the general business insurance industry,” he said.

Regulator to act
The Head, Public Relations at the National Insurance Commission (NIC), Mr Kojo Ghunney, admitted that the commission was aware of the fake insurance stickers and other malpractices hampering the industry.

“We have arrested some of such fake companies in the system and sent them to court. We should be mindful that it is not only insurance agents who issue fake stickers and certificates, but some who claim to have registered as insurance companies and try to operate as such,” he said.

He announced that the NIC would soon put out an advertisers’ announcement on the list of insurance companies in good standing in the country to guide the public as to who to do business with.

“We want to warn the public not to do business with any other insurance company apart from what will be published or else they risk future claims should any incident occur,” he stated.
 
Public education
Mr Ghunney said as part of the NIC’s intended public education campaign nationwide, officers from the legal department would begin in the Central Region where they would educate the public on all aspects pertaining to insurance but not limited to fake stickers.

“The NIC has also considered adding more security features to stickers, for instance, so that unscrupulous people in the society cannot duplicate. Besides, the law enforcement agencies and the public will be able to detect genuine insurance stickers from the fake one,” he said.

He described as unfortunate the Ghanaian attitude of doing business through the backdoor or through unofficial means and cautioned against that.

“The public should try and deal with only accredited companies and when in doubt they must notify the commission,” he said.  — GB

Client’s responsibility
An insurance expert, Mr Mawuli Zogbenu, said it was important that clients did due diligence to confirm the authenticity of insurance documents and stickers, particularly motor insurance policy.

“It is important for motor insurance clients to insist on the insurance certificate which states the insurance policy number with details about the vehicle and the vehicle owner/driver, in lieu of the policy certificate,” he stated.

He urged the NIC to take a cue from the Driver and Vehicle and Licensing Authority (DVLA) which, in 2014, introduced the electronic roadworthy certificate with a detectable bar code.-GB