(a) State three roles of National Insurance Commission. (b) List and explain three methods of providing indemnity.

Answer Details

(a) Three roles of the National Insurance Commission (NAICOM)

1. To regulate, supervise and control the insurance business in Nigeria, ensuring companies operate within the law.
2. To register, license and where necessary cancel the registration of insurers, reinsurers, brokers and loss adjusters.
3. To protect the interests of policyholders and the public by ensuring insurers remain solvent and settle genuine claims, and to approve rates, terms and conditions of insurance.

(b) Three methods of providing indemnity

1. Cash payment: The insurer settles the claim by paying the insured a sum of money equal to the amount of the loss, this being the commonest method.
2. Repair: The insurer restores the damaged property to its former condition by arranging and paying for its repair, as is common in motor insurance.
3. Replacement: The insurer provides a new article in place of the one lost or damaged, restoring the insured to his former position, as sometimes done with glass or jewellery.
4. Reinstatement: The insurer rebuilds or reinstates property, for example a building destroyed by fire, to its pre-loss condition.