Leadway Assurance Company Limited has explained the issue surrounding the alleged failure of a consortium of insurance companies (including Leadway Assurance) to pay claims due to some deceased employees of the Federal Capital Territory Administration under its Group Life Insurance scheme.
According to a statement on Sunday, the FCTA Group Life Insurance scheme was being handled by a consortium of underwriters starting from 2007 to date, and certain claims were reported between 2007 and 2012.
It said the process was that every notified claim must be properly documented before a discharge voucher could be issued and payment is then made in accordance with the policy contract subject to any prevailing law governing payment of benefit at the time of settlement, which, in this case, was the Pension Reform Act 2004.
“Some of the claims received were not properly documented and so could not be concluded till 2015 when full documentation was received,” it stated.
It stated that by the time payments were due to beneficiaries, the Pension Reform Act 2014 was in effect.
Before the PRA 2004 was amended by the PRA 2014, the statement explained that life assurance benefits had to be paid to the deceased employee’s Retirement Savings Account with their named Pension Fund Administrator.
Access to the deceased account, it added could then only be secured under a testamentary WILL of the deceased or by Letters of Administration issued to deceased legal representatives under Probate following intestacy.
The firm said the review of the PRA 2004 came as a result of public outcry on the difficulty/inability of the families of deceased persons to promptly access life assurance benefits from the RSA of the deceased persons.
It added that the PRA 2014 now allows benefits to be paid directly to the named beneficiaries of the deceased persons and the responsibility for compliance is on the insurer.
“In keeping with the PRA 2014, we issued our cheques in favour of the named beneficiaries of the deceased members of the FCTA,” it stated.
According to the statement, the FCTA is however insistent that for all claims reported prior to the PRA 2014, payment must be administered through the named PFAs of the deceased members in accordance with the PRA 2004 rather than as amended in 2014.
The firm noted that some payments had already been issued in the name of beneficiaries and collected.
“In order to prevent further hardship to claimant beneficiaries while a tussle continues between the FCTA and insurers, the decision was finally made that payment cheques will be reissued in the name of the requisite PFAs as required under duress by the FCTA,” it said.
The statement added that only delays being experienced are for claimants whose PFA details are not provided or where the claims substantiating documents have not been provided.