By ROSEMARY ONUOHA

Anxiety has enveloped insurance companies that bided for the federal government’s compulsory Group Life cover for civil servants for year 2011, as they anxiously await the Head of Service to make its choices public by month end.

Investigation carried out by Vanguard reveals that over 25 companies that are into life insurance business in the insurance industry who bided for the cover are apprehensive and keeping their fingers crossed while awaiting the federal government to decide on which company will handle its Group Life scheme this year.

It will be recalled that these companies were mandated to bid for the cover on a company basis against the consortium basis which was operational before now but was forced to be discarded when controversy arose, coupled with the fact that insurance companies could not agree on premium pricing for the business in 2009/2010.

Because of the controversy, the scheme was pushed forward for renewal three months after it was due for renewal, consequently, three months after the expiration of the 2010/2011 insurance year of the Federal Government workers’ Group Life insurance, the office of the Head of Service is yet to renew the policy for 2011/2012. The civil service group life was renewed March 1, 2010 and should have been renewed by March 1, 2011.

It will be recalled that Senator Nkechi Nwaogu, Chairman, 6th Senate Committee on Banking and Insurance had summoned Mr. Steve Oronsaye, former Head of Service (HOS) to the National Assembly over petitions on payment and selection of insurance companies for 2010.

A consortium of insurance firms had petitioned the Senate Committee over non remittance of about N7 billion as premium for management of civil servants’ Group Life insurance scheme by Oronsaye.

The petitioners said the office of the HOS failed to remit N2 billion even as it was provided for in the 2009 budget and that instead, Mr. Oronsaye had used the money as down payment for the 2010/2011 insurance year.

The consortium said, “N5 billion was the approved premium in 2008 for Group Life. N1 billion was set aside to settle deaths during the transition period of the group life. Till date no account was rendered to the consortium by the Lead Underwriters.”

When they appeared before the committee, the petitioners alleged that the office of the HOS chose five consultants to manage 85 per cent of the premium for the group life insurance for civil servants with the firms also serving as brokers.

Speaking on behalf of the petitioners, Mr. Fidelis Ajufo said, “We also wish to state that the appointment of insurance brokers and underwriters for 2010 have not followed due process, as some of the insurance brokers were made to undertake oath of secrecy, some appointed insurance brokers do not have NAICOM licence and they do not belong to the Nigerian Council of Registered Insurance Brokers as required by the insurance Act 2003.

The petitioners alleged favouritism in selection of managers for the group life insurance scheme by the HOS, saying “The allotment is lopsided, whilst some brokers and underwriters are collecting commissions and premiums of N250 million and N2.4 billion respectively, others are allotted less than N30 thousand and N300 thousand respectively.”