Insurance

Controversial group life rate remains at 6.8% to 1000

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Chuks Udo Okonta

Controversies on amounts to be charged on group life insurance which in recent years has set underwriters apart has been put to rest as the National Insurance Commission (NAICOM) has retained the rate at 6.8 per cent to 1000.

NAICOM in a recently released approved rates for compulsory insurances to the operators, pegged the rate at 6.8 per cent per mile and urged every insurance to comply, stressing that it will strictly monitor and enforce compliance.

Operators, before now, in a bid to secure businesses quote outrageous rates leaving them with little or no profits after settlements of claims.

Efforts to stem the challenge led to a market agreement which offered rates to be charged. But this was not adhered to.

According to the former Commissioner for Insurance Fola Daniel: “The violation of a market agreement reached by all insurance companies following the Ijebu-Ode retreat was saddening as it resulted in the abortion of an excellent attempt to self regulation and discipline by the operators.

“Even before the ink with which the agreement was written had dried, a portfolio that a group of companies had underwritten and the cover running, was purportedly poached by another company, without just cause.”

Daniel lamented that the peak of the professional misconducts overtly displayed by operators were not hidden from inception of the group life account when practitioners threw ethical behaviours to the wind.

He said, “Much more serious acts of indiscipline were displayed with respect to the Group life cover. Right from the response to the invitation for bids, a lot of our members could not demonstrate good corporate citizenship as they were unable to produce published accounts or valid tax clearance certificates.

“Some brokers even applied without valid licenses, while others attempted to trade with only the CAC registration, but for the vigilance of the commission”

He stated further, “As if this tendency to criminality was not enough, some of our colleagues did all they could to get appointed, their incapacities notwithstanding as if the Public Procurement Act should not be followed or did not apply to insurance contract in any way”.

He recalled that some insurance companies even resorted to destroying themselves by every means available including the media just to have they way.

“Some resorted to blackmail soliciting the help of politicians to frustrate government policy. They wrote spurious petitions to intimidate government into appointing them to participate in the scheme. As if Newspaper publications were not enough, they got the legislature to conduct unnecessary public hearings in attempt to intimidate the executive branch of government.”

The regrettable attitudes of insurance practitioners concerned, the commission said, had cost the entire industry some goodwill and confidence which took the sector some sweat rebuild in recent years.

“Suffice to say the cost of these misbehaviours to us is enormous – loss of business, diminished goodwill and confidence of the insuring public”.

Worst still, he said that insurance brokers that were supposed to arbitrate over the squabble between insurance companies were themselves fueling the commotion.

Group life insurance is typically offered as a piece of a larger employer or membership benefit package.

Section 4 (5), of the Pension Reform Act, 2014 states that “Every employer shall maintain a group life insurance policy in favour of each employee for a minimum of three times the annual total emolument of the employee and premium shall be paid not later than the date of commencement of the cover.
But in the case of federal government workers, the group life insurance contract for the year expired since July and since then, agitations have been raging over its renewal by the general public while the media have been probing the reason for the delay.

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