Insurance

Police: Dead personnel’s insurance claims rise by 300%

By Sunday Ojeme

Frequent tragedies befalling Nigeria’s security agencies, especially the Nigeria Police Force (NPF), have shot up the insurance claims paid to victims’ families by over 300 per cent in two years.

The development, if not checked, is soon likely to increase the N5.4 billion annual budgets for Federal Government workers’ Group Life insurance scheme.

According to the current Digest published by the Nigerian Insurers’ Association (NIA), life insurance operators paid over N312.85 million group life claims to the Nigerian Police Force on deceased officers in 2016 as against N74 billion paid in 2014.

The figure represents over 300 per cent increase, a development that may affect the budget, if the threat on police officers’ lives fails to abate.

According to the breakdown, ARM Life paid the largest claims amounting to N54.29 million, followed by Custodian Life Assurance Limited, N41.66 million.

Findings revealed that the security outfit lost more officers in 2016 due to growing insecurity and daring attacks on its personnel by armed bandits.

Prior to the current revelation, a Nigeria Police Force insurance officer, Mr Isyaiku Mohammed, had said that the Force needed over N20 billion to cover insurance claims of over 3,000 police officers who died in active service.

The failure of government to also defray premium on its Group Life policy has often led to delayed compensation of such victims’ families.

An insurance broker, who lamented the situation recently, said while the Federal Government is yet to pay premium for current 2017, it only paid 62 per cent for that of 2016, leaving a balance of 38 per cent.

Decrying Federal Government’s failure to urgently pay premium for its workers, he revealed that apart from not paying the premium in full, it was also delayed for an upward of four months from August to December before 62 per cent of the sum was paid to the selected brokers.

The group life policy is in compliance with Section 4 (5) of the Pension Reform Act, 2014, which 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.

Early in the year, a sum of N22.4 billion was budgeted as premium for the Presidency and ministries, departments, and agencies (MDAs).

According to the document, the Federal Government’s life insurance had a provision for N15 billion, the highest figure for insurance premium.

A breakdown of the amount showed that while about N22.4 billion would be spent on insurance premium, Ministry of Agriculture and its parastatals would make do with N1.9 billion.

Also, Federal Government subsidy for farmers through the Nigerian Agricultural Insurance Corporation (NAIC) was put at N917.7 million; National Lottery Trust Fund is N881.4 million; Federal Ministry of Foreign Affairs and its missions, N801 million; Institute of NigComSat IR and Upgrade got N5,979 million; Police Formations and Commands, N304.6 million; Nigeria Security and Civil Defence Corps (NSCDC), NN120.3 million and Health, N44.4 million.

It was further revealed that while the Presidency and parastatals under it had N83.8 million;Office of the Secretary of the Government of the Federation and its parastatals got N31.2 million.

The Ministry of Finance had a budget of N38 million for insurance premium while the Debt Management Office was allocated N1.5 million for the same purpose.
Other ministries and agencies included Investment and Security Tribunal, N6.7 million; Budget Office of the Federation, N1.07 million and Federal Ministry of Labour and Employment, N36.4 million. The Office of the Accountant-General of the Federation also had a provision of N15.3 million, while the Pension Transitional Arrangement Department had N30.5 million budgeted for the same purpose.

Others include Defence Missions, N371.5 million; Nigeria Airforce, N15.3 million; Defence Space Agency, N5.7 million; Nigerian Navy, N6 million and the Nigerian Defence College, N9.3 million.
Although the Federal Government had been slow in paying premium for both life and general insurance, the Office of the Head of Service of the Federation had hinted of the need to review the benefit of group life cover herein the insured only benefits when he is dead.

A top official of OHCSF was quoted to have lamented that the current Group Life scheme was not in tune with global best practices and as such, failed to benefit civil servants across the federation as expected.
He said the only benefits civil servants received from group life scheme was death benefit, whereas it could be extended to accidents, disabilities, residual benefits and other ancillary services.

According to him, government will review the current Group Life Assurance Scheme from an annual policy to a long-term policy for effectiveness and efficiency in order to address these drawbacks, enhance the benefits derivable from the scheme and bring the Group Life Insurance Policy in line with global best practices.

He said: “It is usually N5.4 billion annually for civil servants Group life insurance. That’s the figure and that had been recurring for the last three or four years. For this current one, I think we shortlisted 21 insurance companies, but the BPP gave us a certificate of no objection for 20 and 108 insurance brokers.

“We can only work with those approved by the BPP and that approval had been confirmed by Mr. President.”
Chairman NIA, Eddie Efekoha, who considered insurance as the best tools to effectively manage the economy resources, urged the government to leverage insurance to mitigate its risks, stressing that the government should give more attention to group life insurance scheme as it remains one of the ways the government could cater for workers’ risk liabilities.

New Telegraph

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