Nigeria Implements Group Life Insurance For Federal Workers. The Head of the Civil Service of the Federation, HOCSF, and the Bureau of Public Procurement, BPP, have selected 20 underwriters and 108 insurance brokers to take on N5.4billion group life of the Federal Government but no premium commitment has been made.
The underwriters for the government group life insurance were selected in compliance with Section 4 (5) of the Pension Reform Act, 2014 which states that “every employer shall maintain a group life insurance policy in favour of each employee for a minimum of three times the annual total emolument of the employee and premium shall be paid not later than the date of commencement of the cover.
Extended to accidents, disabilities, residual benefits and other ancillary services.
He also said the only benefits civil servants received from group life scheme was death benefit, whereas it could be extended to accidents, disabilities, residual benefits and other ancillary services.
Adelakun, under whose purview Group Life Insurance Scheme falls, explained that government would review the current Group Life Assurance Scheme from an annual policy to a long term policy for effectiveness and efficiency in order to address these drawbacks, enhance the benefits derivable from the scheme and bring the Group Life Insurance Policy in line with global best practices.
From an annual policy to a long term policy:
“It is usually N5.4 billion annually for civil servants Group Life insurance. That’s the figure and that had been recurring for the last three or four years. For this current one, I think we shortlisted 21 insurance companies, but the BPP gave us certificate of no objection for 20 and 108 insurance brokers. We can only work with those approved by the BPP and that approval had been confirmed by Mr. President.”
On how the premium would the funded, he said:
“After the response was received, we had to write to Mr. President for approval. So, since the day we got that approval from Mr. President, we’ve continued with the processes of making sure that the perfect thing is done before we present to the Ministry of Finance for payment. There is money for it, it is in the appropriation and nobody had told us that there is no money to pay for it.”
Adelakun said he understood the dangers delayed premium posed to civil servants but admitted that the government would rise to the occasion and cover such situation. He, however, expressed belief that selected insurance companies would give the federal government discount for having paid the same premium for the past three to four years. Or better still, add value to the policy.
There shall be no cover in respect of an insurance risk unless the premium is paid in advance
“The Federal Government will now make sure that if there is any death within that period, it will be direct payment to the beneficiaries of those people. Under the implementation of the provisions of Section 50 (1) of the Insurance Act 2003, the receipt of 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. The policy applies to all. Those who default in payment of premium cannot enjoy claims. It does not work like that. In the past there were issues of people making claims even when they were not up-to-date in their payment of premiums.”
The federal government has still not payed the N5.4billion premium of its civil servants in the country six months after it was due for renewal.