Managing Director of Loyalty Life Insurance Company, Ernest Frimpong has called for the passage of the Group Life Insurance Law within the short to medium term.
According to him, the law will not only safeguard the interest of employees but also increase insurance penetration in the country.
The National Insurance Commission has in recent times reiterated its stance on the passage of the Compulsory Group Life Insurance Law, which is expected to cushion employees in the likelihood of unpredictable circumstances.
The bill which is currently being processed by the Ministry of Finance before its passage will mandate employers to purchase group life insurance policies for their employees to aid them plan financially and reinforce employee confidence.
According to the Deputy Commission at the NIC, Michael Kofi Andoh, the passage of the bill into law will afford beneficiaries of employees a multiple salary of their annual income.
In an interview with Citi Business News, Mr. Frimpong said the passage of the bill is in the right direction for the growth of the insurance industry.
“In Ghana a lot of people do insurance because it is compulsory. So for instance you have motor insurance which if you don’t do, the police will arrest you or sometimes people do insurance because they are going to a bank for a facility and the bank is requiring them to have insurance”, he said.
Citing another example he said, “Another example is with contractors, who have been awarded a contract and need insurance. So mostly insurances in Ghana are done because of its compulsory nature of because it is a requirement and therefore that is the reason why this bill that is coming up is in the right direction since it will have a lot of compulsory insurances including group life where every company is required to use insurance to cover their staff for work related injuries”.
He added that the law once effective will increase insurance penetration in the country. “The move will also really help increase insurance penetration in the country and strengthen insurance companies if the rating is done right and the right premium is charged to be able to pay claims quickly”.
Meanwhile, the NIC says insurance penetration in Ghana may not witness an increase as earlier projected should the Coronavirus outbreak persist.