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FG plays games with aggrieved insurers on Group Life

By Patience Saghana
There is a strong protest from insurance companies that made frantic efforts to be in the 2010 federal government’s group life scheme such as African Alliance, IGI and Mutual Benefit Assurance but were shut out of the federal government business for one reason or the other. The scheme only approved 17 insurance companies whilst the Head of Service of the Federation did promised that the scheme would admit more insurance companies but nothing was heard about the promise as at the time the scheme was flagged off in Abuja last week Thursday.

The 17 insurance companies in the scheme are: Leadway Assurance Company; Niger Insurance Plc; Crystalife Assurance Company; Cornerstone Insurance Plc; Oceanic Life Assurance; Capital Express Assurance; Royal Exchange Prudential Life; Guaranty Trust Assurance and Crusader Life Insurance.

Others include: Goldlink Insurance; A & G Life Assurance; Zenith Life assurance; Aiico Insurance; Standard Alliance Life; GNI Life Assurance; Intercontinental Life Assurance and Lasaco Assurance Plc.

However, there has been allegations and counter allegation over strict compliance to the criteria for selection of the companies approved by the office of the Head of Service.

Vanguard investigations revealed that  some of the major criteria for bidding include insurance companies’ 2008 Life accounts duly approved by National Insurance Commission (NAICOM) and tax clearance certificate hence companies whose life accounts had not been approved as at the time of bidding by the National Insurance Commission (NAICOM) were selected because some of them are composite and because they presented an account of their companies which may not necessarily be the Life accounts as set out, scaled the hurdle while some insurance companies that are either companies or life office who claimed they met all the criteria were alleged to have been left out.

It was learnt that some of the approved companies were able to sail through with NAICOM’s license to operate as insurance companies and that alone speak volumes in the selection. Vanguard findings showed that IGI’s Gen. Gowon; Mutual benefit Assurance’s Pat Utomi and African Alliance tried the best they could to have their companies enlisted in the scheme but to no avail.

In a letter that African Alliance wrote to the Head of Service and which it copied Secretary to the Government of the Federation, NAICOM, Ministry of Finance and the Nigerian Insurers Association (NIA) claimed that it duly met all the conditions yet the company was left out of the scheme.

African Alliance Insurance Plc in its letter to the Nigerian Insurers Association (NIA) singed by its Managing Director, Mr Alphonse Okpor said, “From my discussion with the Director (Welfare), one of the most important documents to be submitted is NAICOM’s approval of the last account which is 2008 account. If the bid document are to meet 100 per cent compliance at the time of submission, some insurance companies who are yet to receive NAICOM’s approval on their life account would not have been selected.

Two of such companies have been included on the list of 17 companies which bid were accepted by your office (Head of Service) whereas African Alliance Insurance Company Plc which is one of the first companies to receive NAICOM’s approval was excluded”

It stated further, “If this process is truly transparent, we suggest that the short-listed 17 insurance companies be referred to the National Insurance Commission to confirm appropriate approval or otherwise”. Besides, insurance companies were paid N 5 billion premium for the 2008/2009 scheme and N 4 billion was initially approved for the premium in 2009 but the N 4 billion, Vanguard findings revealed has been cut down to N 2 billion yet the premium is not yet paid to the insurers.

And now the scheme has been lumped up with the army and police employees which premium was N 20.2 billion initially and slashed  to N 7 billion as at the time of writing this report.

And this was confirmed by Mr Fola Daniel, Commissioner for Insurance in an interview with Vanguard in Abuja recently. He said, “I think the problem with the system was the premium. They felt N 4 billion paid last year was over sufficient, now reducing it by half. Is it part payment or administrative, whatever. I think those are the little issues on it”. He corroborated, “A provision was made last year but the premium was a far cry from what ought to be paid.

Government does not default in payment, although it may be a little late, but they will pay. I think there is a delay and I also have it from very good authority that budgetary provision for 2009 that has not been spent for one reason or another, the national assembly is giving them up till April. So the Federal Government can come up tomorrow and pay the bill for last year”


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