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Chuks Udo Okonta
Workers in 30 states in the country are without valid group life insurance cover, the National Pension Commission (PenCom) has said.
A document obtained from PenCom’s website revealed that only Lagos; Osun; Ondo; Edo; Kaduna; Ekiti and the Federal Capital Territory (FCT) have provided group life insurance policy for their workers.
In Nigeria, group life insurance is compulsory by virtue of the Pensions Reform Act of 2004 (PRA 2004). Section (9) subsection (3) of the Act requires employers to maintain a life insurance policy for their employees for a minimum of (3) three times the annual total emolument of the employees. For some perspective, emergency savings are generally expected to cover about 3 – 6 months’ worth of expenses . It is therefore fair to say that 3 years’ worth of annual income would cover way more than that.
Section 4(5) of the PRA 2014, provides 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”.
Section 4(6) also provides for situations “where the employer failed, refused or
omitted to make payment as and when due, the employer shall make arrangement
to effect the payment of claims arising from the death of any staff in its employment
during such period”.
Section 8(1) of the PRA 2014 provides that “where an employee dies, his entitlements under the Life Insurance Policy maintained under this Act shall be paid by an underwriter to the named beneficiary in line with Section 57 of the
Insurance Act”.
Section 9 of the PRA 2014 provides that “where an employee is missing and is not
found within a period of one year from the date he was declared missing, and a
board of Inquiry setup by the Commission makes a determination that having
regards to available information and all relevant circumstances, it is reasonable to
presume that the employee is dead, the provisions of Section 8 shall apply”.
Section 57(1) of the Insurance Act 2003 provides that “a policy of insurance shall
not be made on the life of a person or other event without inserting in the policy the
name of the person interested in it, or for those whose benefit or on whose account
the policy is made”.
Section 57(2) of the Insurance Act 2003 provides that “the provisions of subsection
(1) of this section shall not invalidate a policy for the benefit of unnamed persons
from time to time, falling with in a specified class or description if the class or description is stated in the policy, with sufficient particularity to make it possible to establish the identity of all persons who at any given time are entitled to benefit
under the policy”.
Section120 of the PRA 2014 defines “annual total emolument in relation to Group Life Insurance Policy to be maintained by an employer means the gross emoluments
of an employee or deceased person”.
