Uncertainty over federal civil service group life insurance scheme

• NAICOM to disapprove firms over stale licences
• Workers at risk over expired scheme, others
• Budget allocates N60.3m premium for HOS, SGF

The National Insurance Commission (NAICOM) may withhold approval for the lists of insurance companies and brokers to be sent by the Head of Service of the Federation for the renewal of Group Life Insurance Scheme in the Federal Civil Service (FSC), on grounds of expired operating licenses.

The Group Life Insurance of Federal Civil Service workers had expired since July 2016, and is yet to be renewed over issues, The Guardian learnt were associated with lack of funds, review of modalities to reposition the scheme and the selection of qualified firms and brokers to handle the scheme.

Further, NAICOM, as the apex regulatory body of insurance sector and adviser to the Federal Government on insurance matters, is said to be irked by the lack of consultation by the Head of Service, Mrs. Winifred Ekanem Oyo-Eta, on processes of reviewing and repositioning the scheme for greater efficiency.

The Guardian learnt that although the Presidency had given approval, but the shifting of responsibility between the offices of the Secretary to the Government of the Federation and the Head of Service of the Federation is affecting the renewal.

The budgetary provisions made for insurance premium in the 2016 Appropriation Act for the Office of the Head of Civil Service of the Federation is N5,739,710 million, while that of the Secretary to the Government of the Federation is N54, 597, 205 million, bringing the total provision to the sum of N60,336,915 million. The budget was however, silent on whether the amount was meant for Group Life Insurance premiums or for premiums on insurance of government assets under the two departments.

The delay in renewal of the scheme portends danger to the civil servants protected by the scheme in the event of risks covered by the policy, there will be no indemnity or payment of claims by insurers due to the “no premium, no cover” policy.

The Federal Government had in February 2016, through the Office of the Head of the Civil Service of the Federation, advertised for expression of interests for pre-qualification as an insurer and insurance broker for Group life assurance cover for all its employees for 2016/2017 in compliance with the Pensions Reform Act, 2004.

For insurance companies, the key requirements for pre-qualification among other prerequisites include being a limited liability company registered in Nigeria and licensed by NAICOM to transact Life Assurance business. Such a firm must also be in possession of assets as stipulated in Insurance Act 2003 and its (2014) published accounts for its life assurance business; and “It must have evidence of claims settlement”.

In respect of insurance brokers, they are required to be limited liability companies registered in Nigeria and licensed by NAICOM to act as insurance brokers; and each “must possess Professional Indemnity Cover with a limit of liability of not less than N10,000,000.00 or 50 per cent of its last annual brokerage income”, among other requirements.

But investigations by The Guardian revealed that the pre-qualification and selection exercise were done without consultation with NAICOM.

When contacted to ascertain if it has given approval for the renewal, an authoritative source in NAICOM told The Guardian that it is yet to receive any communication from the Head of Service of the Federation on the matter.

The source asked: “As an adviser to the Federal Government on insurance matters, did the Head of Service seek the opinion of NAICOM on the state of the Insurance companies and insurance brokers before selecting them?

“You know the insurance companies and brokers are required to renew their operating licences annually and some of them have not done that. Did the Head of Service confirm if their licences are current or not from us?

Reminded that the Head of Service of the Federation constituted a committee for the review of the modalities for the Group Life Assurance Scheme, the source said NAICOM was neither involved nor consulted in the process as the adviser to government on critical insurance issues.

Another top official of NAICOM accused the government of toying with the workers’ life assurance, saying that since it has expired and has not been renewed, the implication is that “no premium, no cover”.

He said: “I hope the government is aware that no insurance company will be held responsible to pay any claim if anything happens to any of the workers within this period it has not been renewed. The workers are on their own and not covered by life policy. So, they or their relations have no right to any claims in event of death or foreseen disability.”

The source further wondered if the Federal Government is cash strapped by the recession or deliberately underplaying its human capital which constitutes a vital element of its work force.

When The Guardian contacted the duo of Special Adviser to the President on Media and Publicity, Femi Adesina, and the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, through text messages neither of them commented onn the issue. In their respective responses, they said: “Please get in touch with Secretary to the Government of the Federation office. Thanks.” and “Talk to the Head of Service, Sir,”.

However, when contacted, the Director of Press, office of the Head of Service, Mr. Rasheed Imrana, could not confirm why the renewal had not been done up till now, almost three months after it expired.

He blamed some unnamed insurance companies for not living up to their obligations in the payment of claims in the past, just as some civil servants also failed to give detailed information about themselves and their next of kin thereby frustrating the claims process in event of death or disability.

Imrana explained that these hiccups associated with the scheme informed the constitution of the eight-man committee headed by the Permanent Secretary, Common Services Office, Mr. Yemi Adelakun, to work out modalities to reposition the Group Life Insurance Scheme in the Federal Civil Service by Oyo-Ita, in February.

When reminded that the workers are at risk in the absence of policy renewal, he assured that efforts were being made to ensure that it is made efficient and renewed.