Government unaware of insurance premiums fixing
Posted on: 2010-May-10        Joy fm
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Transport Minister Mike Hammah says he was sidelined in the decision by the National Insurance Commission (NIC) to increase insurance premiums paid by commercial drivers.

Mr Hammah said although such issues are very sensitive, his ministry was never consulted in discussions to arrive at the decision.

“This is an issue that will impact on transport fares, it is important for us to have a very wise stakeholder consultation and the Ministry of Transport should have even had to play a more pronounced role in such a decision but here I am; nobody notified me,” he said.

“I don’t know why they would have to take this decision without consulting the Ministry of Transport and for that matter government; It is totally unacceptable.”

Commercial drivers are threatening to increase their transport fares by at least 50 percent if an upward review in insurance premiums is allowed to take effect today.

The premiums, which have been approved by the National Insurance Commission (NIC) are about double what the drivers currently pay and were supposed to have taken effect last Monday.

The Chairman of the Ghana Road Transport Coordinating Council (GRTCC) Matthew Hayford however maintains the one-week postponement to allow for consultations with commercial drivers’ unions have not been enough and that the two parties agreed at the last meeting to set up a committee to review the premiums.

He tells Joy News any decision to go ahead with implementation would trigger arbitrary increases by the drivers.

“Our calculations indicate 49.4 percent but let me tell you what is happening… When these things are happening and the insurance industry is behaving like that, it makes the drivers do their own thing so I cannot go there and tell them that take this amount. It’s like everybody is doing their own thing [in a free market].

The GRTCC also argues that the increases are unjustified in the first place.

To drive home their point, the council hired a consultant Kofi Aikins to highlight what they describe as inefficiencies in the insurance industry such as price undercutting.

“If they can look among themselves, there are lots of leakages they can block that will bring in more money,” he said.

The Ghana Insurance Association has declined comment on the matter.