The National Insurance Credit Policy

The National Insurance Credit Policy was issued in December, 2005 in an effort to deal with the persistent problem of unpaid insurance premiums.  It is hoped that public awareness of this policy will foster a change in our credit culture and increase adherence to insurance contract terms.  The main guidelines of this policy are as follows:

1.      Insurance premiums must be paid as and when they fall due.

2.      Insurance policy within sixty days of the policy inception date provided that where the insurer and insured have agreed otherwise, it shall be stipulated.

3.      A contract of general insurance shall incorporate a cancellation condition which shall stipulate that the policy shall be cancelled if the premium is not paid by due date.

4.      An insurer who invokes a cancellation condition shall be entitled to premium for time on risk.

5.      An insurer who cancels a policy shall do so in writing to the Insurance Broker or to the client (for direct business and shall issue a circular to the secretariat of the Insurers Association of Zambia (IAZ) and the Insurance Brokers Association of Zambia, (IBAZ) for onward transmission to all their members detailing the insurance policy so cancelled and the insurance broker or direct insured client involved.

6.      No insurer shall accept or issue a previously cancelled insurance policy unless the outstanding premium has been settled to the insurer who issued the original contract of insurance.

7.      Every Insurer shall furnish the Registrar of Pensions and Insurance with full details of all outstanding premiums not later than twenty-one days after each quarter.

8.      Any credit period extended to an insured entity shall not exceed 11 months and must be finalized within 21 days of policy inception plus first premium instalment.  If an insurer delays in confirming the agreement then the first instalment shall be deferred by the equivalent number of days.

9.      When making premium payments to insurers, Insurance Brokers shall make reference to the specific policies and debit notes being settled.

10.  Where a claim occurs before the cancellation period, the Insurer shall pay the claim provided that the full premium shall be paid immediately.

11.  If an Insurance Broker, on its own volition, decides to extend credit to its clients such agreement will in no way derivate from the brokers obligation under he insurance Act. 

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