Government selects 20 firms for N5.4b group life deals
The Head of Civil Service of the Federation (HOCSF), and the Bureau of Public Procurement, BPP, have nominated 20 underwriters and 108 insurance brokers to take on N5.4billion group life insurance for the Federal Government.
However, group life insurance, offered by an employer or large-scale entity (i.e. association or labour organization) to its workers or members, by purchasing coverage through a provider on a “wholesale” basis for its members, the coverage costs each individual worker/member much less than if they had to purchase an individual policy. Those receiving coverage may not have to pay anything “out of pocket” for policy benefits or they may elect to have their portion of the premium payment deducted from their paycheck.
Being a member of a company’s group life insurance scheme will provide financial peace of mind for employees, safe in the knowledge that their loved ones will be financially secure in the event of their death.
The Guardian learnt that the insurance companies were selected based on their track records, claims settlement profile, and other criteria.
The operators for the government group life insurance were picked in compliance with Section 4 (5) of the Pension Reform Act, 2014. The law states that “every employer shall maintain a group life insurance policy in favour of each employee for a minimum of three times the yearly total remuneration of the worker and premium shall be paid not later than the date of commencement of the cover.”
The Head, Corporate Affair and Human Resources, Nigerian Insurers Association (NIA),the umbrella of all insurance companies in the country, Davis Iyasere, confirmed this in a telephone conversion. He described this as a welcome development in the insurance sector, as underwriters/brokers would have the opportunity to serve the citizens and also pay premium as at when necessary.
Also speaking on the progress, Ojeme Alphonse, of the African Alliance Company Limited, whose firm is among the 20 underwriters, confirmed that the decision was long overdue since the previous insurance expired in June 2016.
The Permanent Secretary, Common Services Office in the OHCSF, Yemi Adelakun, however complained that the current Group Life Scheme is not in tune with global best practices and as such, failed to benefit civil servants across the federation as expected.
He said the only benefits civil servants received from the scheme were death benefit, whereas it could be extended to accidents, disabilities, residual benefits and other ancillary services.
“We want civil servants to take maximum benefits of the insurance scheme. A situation where government will spend N5.4billion to cover this scheme and civil servants will not benefit anything except those who died, will not happen again,” he added.
Adelakun, under whose purview Group Life Insurance Scheme falls, explained that government would review the current Group Life Assurance Scheme from a yearly policy to a long term policy for effectiveness and efficiency in order to address these drawbacks. It will also enhance the benefits derivable from the scheme in line with global best practices.
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