Nagico increases insurance premiums by 30 percent

POSTED: 04/17/13 1:28 PM
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St. Maarten – The announcement made by Nagico that motorists will face a 30 percent increase in premiums, has sent motorists scampering to find other insurance companies where they will pay cheaper premiums.

In a memorandum to all staff, local agents and brokers following a meeting on March 20, it was announced that they are forced to amend the motor third party rates.

It was indicated in the note from Nagico Insurances that effective from April 2 the third party rate has been amended; the private third party insurance will be increased by 30 percent and the all other third party categories will be increased by 15 percent. “These increases will be effective immediately for new business and with effect from June1, 2013 for renewals,” the note stated.

It was further mentioned that for all renewals for the month of April and May, the old rate will apply but the new ones will have to pay the increases.

A statement from Nagico to this newspaper stated “We have been experiencing high losses up to 80 percent loss ratio on premiums for third party policies. Nagico has not increased third party premiums in more than 10 years, in the meantime the cost of vehicles and parts and labor has gone up in some cases over 100 percent,” the statement explained. “Nagico have been providing road service assistance to clients without charge and turnover and other taxes and fees continue to increase; the overall costs in both Dutch and French side continue to increase at a rapid rate over the 10 years.

Nagico stated that it will continue to maintain all no claim discounts on third party policies up to  50 percent.

Meanwhile, some other insurers have deemed this move by the insurance company as “preposterous” since insurance companies are regulated by law and as a result they cannot increase the premiums before seeking governments’ approval.

The insurance company is regulated by the Central Bank and they are the ones who have to ensure that whatever is done by insurance companies, are done properly and according to law.

There is also a clause in the insurance hand book which states clearly that NAGICO “will not be liable for loss or damage resulting from any authorized driver falling  asleep whilst driving the vehicle.”  All insurance companies have an obligation to underwrite its policies basing on the law and the legislation which determines how it should be done, said one insurance agent.

It was explained that in the policy they have to use the law or legislation as its basis. They are not allowed to change or ignore the law but are allowed to add more to the policy, said a member of the public.

Efforts to reach the Minister of Economic Affairs Romeo Pantophlet for a comment on this issue have proven futile.

 

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