By Francis Ewherido
Last Monday, the Minister of Labour and Productivity, Dr. Chris Ngige, inaugurated the Board of Nigeria Social Insurance Trust Fund with Prince Austin Enajemo-Isire, a season chartered accountant, insurance practitioner and banker, as the chairman of the board.
In theory NSITF carries enormous responsibilities, but the verdict of the jury out there on the performance of NSIFT is mixed. One undisputable fact, however, is that NSITF has not realized its enormous potentials. Various reasons are responsible for the underachievement of NSITF, but past leaderships cannot exonerate themselves from blame. Could it be that some of the past chairmen were square pegs in round holes?
“The answer, my friend, is blowing in the wind,” but the recent appointment of Prince Enajemo-Isire as the chairman of the board of NSITF should raise some hope within the insurance fraternity and among employers of labour. Isire’s appointment should raise hope within the insurance industry because if NSITF meets its obligations (of paying benefits to employees of noncontributing companies) and promptly, then it will have positive effect on the image of the insurance industry.
Some members of the insuring public do not seem to know the difference between underwriting firms and a social insurance trust fund manager like NSIFT. “All join” as far as they are concerned and they are right. Employers of labour will also be happy because they will be getting value for their money if NSITF operates effectively. Right now many employers feel they are just making the obligatory one per cent pay roll contributions to the NSITF coffers without expecting any benefits for their employees.
Prince Isire is one of us in the insurance fraternity. A chartered accountant, he has practiced insurance for over 25 years. He started in reinsurance before moving to insurance and was for 12 years the managing director/chief executive of a life assurance firm. He is in a familiar territory. Isire has his job cut out for him. As chairman of the board, his responsibilities include effectively implementingPart 1. 3(b) of the act “the payment of the various benefits provided under this Act to personsentitled to the benefit.” This is one area where the pervasive perception is that NSITF is not living up to expectation. Rightly, Isire singled it out during his inauguration: “The responsibilities (of the board) include the implementation of the provisions of the ECA Act, 2010.”
Another issue the board and management of NSITF must sort out is the perception of NSIFT as only collecting one per cent pay roll contributions and not paying out benefits when the need arises. Many people feel that even when an employee pursues his benefits, the process is cumbersome and frustrating. Consequently, many employers simply make the statutory contributions to NSITF as an obligation. They and their employees have no intention of going to NSITF to seek any remedy or benefits in the event of bodily injury, disability or death of employees while in the course of employment.
Rather they go on to take a group personal accident insurance cover (GPA) either as a stand-alone or they combine the GPA with the statutory group life insurance cover. Life assurance companies and composite insurance companies (insurance companies which handle both life and general businesses like motor, marine, oil and gas, etc) can only remain in business if they pay claims, so they are condemned to paying claims or they perish. Many employers of labour are more comfortable with these companies because they know that in the event of temporary total disablement, permanent total disablement or death of an employee, the claim will be quickly paid once the documentation is complete.
Prompt claims (benefit) payment is the catch phrase and Isire, as a private sector insurance practitioner of over 25 years, knows that too well. What is NSITF current turnaround time on payment of benefits to contributors who make claim? Is it comparable to that of the privately-run insurance institutions? If not, how can Isire-led board speed up the process and catch up with other insurance institutions?NSITF painted a glorious picture on its website, but the general perception is different.
Whether NSITF pays benefit or not, it will remain in business because employers are statutorily required to make contributions to the fund. This can easily lead to complacency and sloppiness. This is something Isire and his team also need to watch out for. NSITF enjoys some kind of monopoly in that it is now solely responsible for handling what used to be Workmen Compensation, hitherto underwritten by insurance companies, but monopoly should not lead to inertia. The truth is employers of labour can obey the law by making the statutory one per cent contribution to NSITF and seek protection for their staff who are exposed to occupational hazards with insurance companies via GPA. Right now, employers of labour take GPA as a matter of necessity. Ordinarily, they should seek this alternative as a matter of choice for additional protection, not the only viable protection.
The task before the new NSITF board is enormous, but can Isire and his team bring a new down in NSITF? I believe they can. But NSITF must first show us what they have done right and then they must begin to habitually do the rights things consistently. Thereafter, they can inform Nigerians of NSITF’s activities. That is the simple definition of public relations which distinguishes it from propaganda: “do well, say it.”
But for a new vision to flourish, systems and processes must change. That means the workforce buying into it. Again, Isire managed thousands of men during the time as chief executive, so he knows what to do. For NSITF, a Moses has arisen.
The NSITF started off as National Provident Fund in 1961. By 1993, the NSITF Act was enacted. Since then the Pension Reform Act of 2004, as amended in 2014, and the Employees Compensation Act (ECA) 2010 have altered the scope of its activities. The Pension Act took away pensions from NSITF, while the ECA abolished Workmen Compensation Act and gave NSITF the sole powers to implement ECA.
Mr. Francis Ewherido is a chartered insurance broker and MD/CEO of Titan Insurance Brokers Limited.