From left: Director Technical, Legal and Admin, Nigerian Insurers Association, Mrs Olawunmi Idewu, Chairman, Eddie Efekoha and Director-General, Sunday Thomas at the event.
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Chuks Udo Okonta
Having been silent since the Ad-hoc Committee of the Federal House of Representatives started the probe on government’s insurance transactions, the Nigerian Insurers Association (NIA) today reacted by saying there is no N200 billion fraud anywhere.
Its Chairman, Eddie Efekoha, who disclosed this at a media parley in Lagos, noted that the Committee may not have been properly briefed about insurance operations and its workings.
He urged the Committee to desist henceforth from making statements that are capable of further damage to the insurance industry, stressing that the Association is insisting that the Committee should engage thoroughly to have a full understanding of insurance transactions before going to the press.
He maintained that the Association is ready to engage with the leadership of the Committee with a view to shedding more lights on the operation of insurance business.
“You have all keenly followed developments in the Federal House of Representatives with respect to the ongoing investigation of some member – companies that insure government assets. You must have heard the various figures and other disclosures given by the Chairman of the Ad-hoc Committee while speaking with the press.
“The Association would have waited for the Committee to conclude its investigation before making its comments but to date so much damage has and is still being done to the image of our industry by some of the statements credited to the Chairman of the committee which are in their material facts are inconsistent with known insurance market practice.
“We will appeal to the Committee to conclude its investigation and where necessary request for clarification from our regulator and or market associations before making public statements that are capable of damaging the image of our insurance industry.
“The position of the Association is summarized as follows: There is no N200 billion fraud anywhere.
“The Committee may not have been properly briefed about insurance operations and its workings.
“The Committee should please desist henceforth from making statements that are capable of further damage to the insurance industry.
“The Association is insisting that the Committee should engage thoroughly to have a full understanding of insurance transactions before going to the press.
The Association is ready to engage with the leadership of the Committee with a view to shedding more lights on the operation of insurance business,” he said.
The leadership of the House set up an Ad-hoc committee led by Honourable Adekunle Akinlade to investigate the multi-billion naira said to have been expended on insurance covers for government properties by Ministries, Departments and Agencies (MDAs).
The resolution of the House was sequel to a motion under matters of urgent public importance moved by Hon. Ossy Prestige, asking the House to compel the Head of Service of the Federation and other statutory government establishments that purchase direct insurance covers to provide detailed data that would cover premiums paid on group life and related government assets.
He alleged that for every N10 billion paid as insurance premium by government, N5 billion was returned to corrupt government officials. According to him, “Although the processes are presumably carried out in line with the Public Procurement Act, it is generally believed that some companies are unduly favoured during such bid. The unduly favoured companies reciprocate by engaging in a fraudulent practice termed Return on Premium.”
Speaking further he said, “a percentage as much as 50 of the premium paid by government is returned to government officials as cash payback, thus creating the biggest recurring fraud in the public sector.
“To best appreciate the magnitude of fraud being perpetrated, for every N10 billion paid as insurance premium by government, N5billion is returned to corrupt government officials,” the lawmaker stated. At the commencement of the probe, the committee vowed to unmask the perpetrators. The chairman of the committee who read the riot act maintained that “no intention to witch-hunt any individual, group of persons or organisation but rather carry out its mandate within the ambit of the law, which is to establish that monies were paid to civil servants.’
He, however, raised eyebrow over refusal of some government agencies to make submission to the committee.
The government agencies that failed to make submission to the committee according to the chairman include: Central Bank of Nigeria, the Nigerian Customs Service, Nigeria Security and Minting Corporation among others.
Settling for the main business, the adhoc committee grilled the Managing Director of Standard Alliance Insurance, Mr Bode Akinboye. The committee, while questioning the Standard Alliance boss, frowned at the document presented before it saying that they were bellow of expected standard. Particularly, the committee was not comfortable with the figures presented by the company’s Managing Director, to the extent that at a point, it questioned the N625,000 invoiced as gross premium on a vehicle worth N12.5 million insured by a Federal Medical Centre.
The committee also queried another N30 million worth insurance done by the company for Ministry of Works where it was paid N900,000 as against the N150,075 premium due to it, leaving a difference of N749,000. At a point, Akinboye admitted that there were typographical errors in the document he presented before the committee. He, however, maintained that the company applied the standard practice in insurance business for its dealings.
Another company, Regency Alliance Insurance Plc, represented by its Executive Director, Business Development, Sammy Olaniyi and the Executive Director, Operations, Mr Akin Adelakun, was equally faced with conflicting figures in their presentation.
At this point the committee asked the companies to produce documents related to their insurance dealing with the Federal Government as well as the detail of individuals that was paid the brokerage fees and the list of brokerage firms that enjoyed the brokerage fees.
In his presentation, NICON insurance Executive Director, Technical Services, Akinsola Ale told the committee that since the privatisation of the company in 2015 the company did not enjoy government’s patronage.
