NAICOM Cracks Down On Fake Insurers, Arrests Suspects In Nationwide Enforcement Drive
NAICOM arrested suspected fake insurance operators in Abuja, warning offenders face prosecution under Nigeria’s new insurance reform law.
NAICOM arrested suspected fake insurance operators in Abuja, warning offenders face prosecution under Nigeria’s new insurance reform law.
The National Insurance Commission (NAICOM), on Thursday intensified its crackdown on fake insurance operators across the country, arresting scores of suspects in Abuja.
The enforcement, in collaboration with police officers from the Divisional Police Headquarters, Mabuchi, also led to seizures of various items used in their illegal businesses operation including computers, generators, fake vehicle documents, particularly third party insurance and number plates among others.
NAICOM warned that offenders would now face prosecution under the newly enacted insurance reform law.
The commission said the enforcement operation marked the beginning of a nationwide campaign aimed at dismantling illegal insurance networks undermining genuine third-party motor insurance and exposing millions of Nigerians to financial risks.
Speaking after the enforcement exercise, NAICOM Director, Legal, Enforcement and Market Development, Dr. Talmiz Usman, said the commission was determined to stamp out fake insurance syndicates operating around vehicle licensing offices and motor registration centres.
According to him, the proliferation of fake insurance policies had defeated the core purpose of compulsory third-party motor insurance, which is designed to protect innocent road users against losses arising from accidents, bodily injuries and deaths.
He told THISDAY, “The exercise is a resolve of the commission to clamp down on fake insurance operators.”
Usman explained that while the government permits citizens to own and drive vehicles, the law also mandates vehicle owners to obtain valid insurance cover to safeguard third parties from liabilities arising from road accidents.
However, he lamented that many motorists merely procure fake certificates to evade law enforcement checks, leaving victims without compensation whenever accidents occur.
He said, “But what do we get? We ended up with people selling fake insurance all over the country. All they think about is that they have insurance which they can just show to law enforcement agencies when driving, and that defeats the objective of insurance.”
He added that many unsuspecting Nigerians had continued to fall victim to fraudulent operators posing as insurers, particularly around Vehicle Inspection Offices (VIOs) and licensing centers.
Ironically, the latest clamp down was carried out on businesses operating just adjacent the VIO office in Mabuchi, suggesting that officials may be colluding with the suspects to issue counterfeit insurance for vehicle owners – allegations which NAICOM has vowed to further investigate.
THISDAY also witnessed instances where VIO official attempted to interfere with the arrests.
However, Usman said, “When there is a claim, there is nobody to pay because, one, you got the insurance from a non-insurance company. Two, you are getting a fake cover that is nothing more than a worthless paper.”
The NAICOM director stressed that under the Nigerian Insurance Industry Reform Act recently signed into law by President Bola Tinubu, only duly licensed insurance companies are legally authorised to issue third-party motor insurance policies.
He declared that cooperatives, VIO officials and vehicle licensing authorities involved in the sale of insurance products were operating illegally.
He said, “That is why we had to carry out the operation we did today, to see how we can put a stop to that. This process is not going to stop only in Abuja. We are going to do it all over the country, and we are going to sustain it aggressively.”
In a major shift from previous enforcement limitations, Usman disclosed that the new law had empowered NAICOM to prosecute offenders directly without routing cases through the Office of the Attorney-General of the Federation.
According to him, “The beauty of the new law is that it empowers the commission to prosecute offenders.”
Under the previous legal regime, he explained, prosecution of fake insurance operators was cumbersome because offences were treated strictly as criminal matters requiring the intervention of the Attorney-General’s office.
“So, we will make sure that all those arrested today are prosecuted,” he said.
Usman also highlighted efforts by the commission to deploy technology to curb the circulation of fake insurance certificates and improve public confidence in the industry.
According to him, the current NAICOM management had established a dedicated Innovation and Regulation Department to automate insurance verification systems and strengthen market integrity.
He explained that the commission’s digital verification portal now allows motorists and law enforcement agencies to confirm the authenticity of insurance policies in real time.
He further disclosed that insurance policies issued by licensed operators are automatically uploaded to the NAICOM database, making verification easier for members of the public.
Despite technological improvements, Usman admitted that public ignorance and weak awareness remained major challenges fueling the patronage of fake insurance vendors.
He said, “Still, there are innocent people who are being deceived because they believe that when they get insurance from a VIO office or from a cooperative, it is valid.”
The NAICOM official also hinted at a wider investigation into possible collusion involving officials around the VIO office where the enforcement operation was conducted.
He said, “It is really sad. We made arrests today, and we are going to make sure that anyone found to be involved will be prosecuted. That is the resolution of NAICOM.”
He noted that the Commissioner for Insurance remained committed to deepening public enlightenment, improving claims settlement and strengthening the industry’s complaints resolution framework, adding that one of the key drivers of the commission’s strategic plan under the new management was claims settlement and the complaints redress system.
According to him, the commission had already begun recording significant progress, evidenced by growing public commendations and positive feedback from policyholders whose complaints had been successfully resolved.
