Deputy Commissioner of Insurance, Michael Kofi Andoh With effect from early next year, with the expected passage of the impending new Insurance Act, all employees in Ghana’s formal sector, will have to be covered by Workmen’s Compensation insurance, taken on their behalf by their respective employers. This move is being made to ensure that the Workmens Compensation Act of 1987 is actually enforced for the benefit of workers who suffer accidents at the work place.
This impending major change to the regulatory framework for Ghana’s insurance industry was revealed on Wednesday by the Deputy Commissioner of Insurance, Michael Kofi Andoh, while speaking at an insurance seminar themed “The Value of Insurance” organized by the Canada Ghana Chamber of Commerce.
Workmen compensation has been compulsory since 1987 but the means by which compensation to workers who suffer accidents at the work place is to be provided has not been spelt out. This has given employers leeway to evade their legal obligations under the act – in many cases employers are willing to contest legally their obligations under the specific nature of an employee’s accident and in most situations employees are unwilling or unable to go up against their employers in court, which is a prohibitively expensive venture. In other cases, employers have been known to simply plead insufficient resources to meet their obligations.
Expectedly, by making workmens compensation insurance compulsory, workers will be henceforth ensured of adequate compensation as set out by the spirit of the 1987 law since compulsory insurance cover of all workers would guarantee financing of the requisite compensation in the form of claims. The new dispensation will only become effective from sometime next year when the new insurance act is passed by Parliament but the insurance industry is already looking up to it to dramatically improve its fortunes. Insurance penetration in Ghana is abysmally low at less than two percent, with compulsory motor insurance accounting for over 40 percent of total general (non-life) insurance premiums. The industry is hoping that compulsory worksmens’ compensation will have a similarly pivotal effect on its incomes.
Typically statistics on the number of industrial accidents in Ghana are hard to come by and are unreliable anyway since most companies are loathe to report such accidents which is interpreted as not having a good safety record. However, insurance chieftains are enthusiastic that compulsory workmens insurance will significantly raise premium incomes of the companies that offer it.