Insurance companies in Ghana are losing approximately GHS390m ($71.6m) in gross revenue annually to fraudsters that issue fake motor insurance stickers to unsuspecting vehicle owners, the head of the National Insurance Commission (NIC), Mr Justice Yaw Ofori, has disclosed.
The insurance commissioner told the Graphic Business in an exclusive interview that the amount represented insurance premiums that should have been paid on about 1.2m vehicles that were found to have used fake insurance stickers.
The Driver Vehicles Licensing Authority (DVLA) reports that it registers over 2.2m vehicles and issues about 1.6m road worthy certificates each year, However, the insurance industry sells only about 1m motor stickers each year.
“Aside the money which is lost, the country is also losing lives and properties for which compensation cannot be paid, “ he said, because those who involved did not have genuine insurance.
He added that the implementation of the Motor Insurance Database which commenced on 20 January 2020, would help curb this menace.
He said, “We have instances where people are claiming to have bought a policy from an insurance company and the company is also denying that they sold the policy. So, to solve this, we decided that the motor insurance policies must go digital and by doing so, we decided to get a software that will help us to instantly issue electronic stickers and instantly receive confirmation that the policy that you have purchased is genuine, giving details of the policy.”
Working with police
He said the commission would be collaborating with the police motor and transport unit which is ready to help enforce the law.
“We are providing them with phones, so all the police officer needs to do is to scan the QR code of the driver’s licence number and he gets the information about the vehicle.
“We will mount roadblocks and check the insurance with the police.”
The NIC said too that the airport police had on 31 January 2020 arrested some workers of Heritage Energy Insurance for dealing in fake insurance stickers.
Mr Oliver Bio, senior manager of the legal department of the NIC speaking in an interview with GhanaWeb explained that, Heritage Energy Insurance Company has been placed under an enforcement action that included a prohibition on accepting new business from the general public.