Insurance and You

July 21, 2021

FG withholds N9.2bn insurance cover for civil servants

FG withholds N9.2bn insurance cover for civil servants

Sunday Thomas, Commissioner for Insurance

By Rosemary Iwunze

There are indications that the Federal Government is withholding the N9.2 billion it approved as premium for group life insurance of federal civil servants.

The amount was due for remittance to the insurance firms last quarter following the approval as announced by the Minister of Information, Lai Mohammed.

Vanguard investigations reveal that the delay is not unconnected to the revenue crunch being experienced by the government.

This development, Vanguard learned, may have also prompted a move by the government to renegotiate for a lower premium commensurate with its revenue.

READ ALSO: FG to sensitise workers on life insurance benefits

However, experts are of the opinion that the implication of the non-payment is that the government had taken to self-insurance, hence in the event of death of any civil servant, the government would pay compensation from taxpayers’ money, a burden that could have been transferred to the insurers who are the professional risk bearers.

Speaking to Vanguard on the development, Managing Director of Universal Insurance Plc, Mr. Ben Ujoatuonu, said that the government is willing to pay premium but its meagre revenue has been a hindrance.

Ujoatuonu stated: “In the last Insurers Committee meeting, there was a representative of the government trying to interact with the insurance industry, indicating that it is willing to take insurance and wants to pay a premium.

“However, the representative wanted to have an understanding of the insurance industry to see how it will be done considering the meagre revenue of the government.”

Also speaking to Vanguard, Managing Director of Afriglobal Insurance Brokers Limited, Mr. Casmir Azubuike, said that with the ‘no premium, no cover’ policy, no civil servant in the country is covered till date.

He said: “The ‘no premium, no cover’ rule does not apply to individuals alone, nor to corporate bodies alone, it is also applicable to the governments.

“So if the Federal Government has not paid premium for group life assurance till date, the implication is that all civil servants that die within that period have no insurance cover.

“As such, the government will have to bring out money from any source and settle the death claim and it will definitely not come from the insurance industry.”

Vanguard News Nigeria