By Favour Nnabugwu
The National President of the Association of Senior Civil Servants of Nigeria (ASCSN), Comrade Bobboi Bala Kaigama has said that the delay by the Head of Civil Service of the Federation (HOCSF) to pay insurance premium for the 2016/2017 group life cover for the over 89,000 civil servants is dangerous. The Group Life Insurance of Federal Civil Service workers were to have been renewed since August 13, 2016 but the Head of Service said there was no money yet to renew the insurance policy.
Kaigama who spoke exclusively to Vanguard in Abuja said that the delay was attributed to lack of fund to pay the premium for the group life which could jeopardise the lives of the affected federal civil servants. Vanguard investigation revealed that the federal government paid N6billion premium to underwriters covering its civil servants for the 2015/2016 fiscal year.
Kaigama said, “If anything happens to any civil servant now, what will happen? They use the money to pay political office holders who go away with huge severance packages at the expense of the lives of civil servants. With this development, any civil servant that dies while on duty or suffers any permanent injury will not get compensation.
“The delay in renewal of the scheme portends danger to civil servants covered by the scheme in the event of risks, there will be no indemnity or payment of claims by insurers due to the “no premium, no cover” policy.”
Section 9 (3) of the Pension Reform Act 2004 requires every employer having up to five employees to maintain a Life Insurance Policy in favour of the employee for a minimum of three times the yearly total emolument of the employee.
However, the enforcement of Section 50 (1) of the Insurance Act 2003 by NAICOM from January, this year stipulates that “the receipt of an insurance premium shall be a condition precedent to a valid contract of insurance and there shall be no cover in respect of an insurance risk, unless the premium is paid in advance”, and voids any form of insurance of which premium has not been paid.
The Director-General, Nigerian Insurers Association (NIA), Mr. Sunday Thomas, said the ‘no premium, no cover’ regulation must be adhered to by both the private and public establishments in order to enjoy insurance cover.
“For the group life, the government seems to be adjusting to the regulation, because the cover now commences from the date of premium payment. If the premium has not been paid, if anybody should die after the date the last contract expired, the government will take responsibility for it,” he said.
It will be recalled that the Federal Government had in February 2016, through the Office of the Head of the Civil Service of the Federation, advertised for expression of interests for pre-qualification as an insurer and insurance broker for Group life assurance cover for all its employees for 2016/2017 in compliance with the Pensions Reform Act, 2004.
For insurance companies, the key requirements for pre-qualification among others include being a limited liability company registered in Nigeria and licensed by NAICOM to transact Life Assurance business. Such a firm must also be in possession of assets as stipulated in Insurance Act 2003 and its (2014) published accounts for its life assurance business; and “It must have evidence of claims settlement”.
In respect of insurance brokers, they are required to be limited liability companies registered in Nigeria and licensed by NAICOM to act as insurance brokers; and each “must possess Professional Indemnity Cover with a limit of liability of not less than N10,000,000.00 or 50 per cent of its last annual brokerage income”, among other requirements.
Further investigations by Vanguard revealed that the National Insurance Commission (NAICOM) as the apex regulatory body of insurance sector and adviser to the Federal Government on insurance matters, was said to be irked by the lack of consultation by the Head of Service,on processes of reviewing and repositioning the scheme for greater efficiency
Chairman of the Association of Senior Civil Servants of Nigeria (ASCSN) Head of Service chapter, Comr. Sunday Olaiya told Vanguard that the chapter would wait for directive from the ASCSN national office before taking any action on the delay.
“We have a duty to wait for directive from the national, at the unit level we cannot do anything, we are handicapped. It is the directive that comes from the TUC president and the President-General of the association that we will follow but for now no directive has come.”