The House of Representatives yesterday resolved to probe the N35 billion insurance cover for fixed and non-fixed government assets in the 2015 appropriation.

Prestige Ossy, in a motion raised the issue on the need to investigate the multi-billion naira cash payouts to government officials annually by insurance companies mandated to provide cover for government fixed and non-fixed assets by way of return on premiums.

Ossy alleged that for every N10 billion paid as insurance premium by government N5 billion is returned to corrupt government officials.

He explained that “the unduly favoured companies reciprocate by engaging in a fraudulent practice termed return on premium, whereby a percentage as much as fifty percent (50%) of the premium paid by government are returned to government officials as cash pay back thus creating the biggest recurring fraud in the public sector.

The lawmaker said, “At the beginning of every financial year brokerage, firm, insurance and reinsurance companies are invited to bid for insurance of government fixed and non-fixed assets.

He noted that although the processes are presumably carried out in line with the Public Procurement Act, it is generally believed that some companies are unduly favoured during such bids.

“To best appreciate the magnitude of fraud being perpetrated, for every N10 billion paid as insurance premium by government, N5billion is returned to corrupt government officials,” Ossy insisted.

He said that if this alleged criminal practice is not checked by the relevant authorities, billions of naira meant for other pressing national needs, would continue to go into private pockets not to mention the adverse effect on the national economy.

Consequently, the House yesterday constituted an Ad-Hoc committee to compel the Head of Service of the Federation and other statutory government establishments that purchase direct insurance covers, to provide detailed data of all premiums paid on group life (general) and related government assets within the last three years.

The House further resolved to investigate the complicity of brokerage firms, insurance and Reinsurance companies in the alleged multi-billion naira return on premium practice and also carry out an in-depth audit of the selection process and execution of such covers by government assets underwriters with the view of “eradicating this fraudulent process.”

The motion received overwhelming support by members when the Speaker, Yakubu Dogara put the question for a voice vote on the issue.

The committee is to report back to the chamber within eight weeks for further legislative action.