Group Life Insurance: Civil Servants groan over non-renewal of policy

As the controversy rages over delays in the renewal of the group life insurance of federal civil servants, the Permanent Secretary (Common Services Office), Yemi Adelakun, who presides over the scheme in office of the Head of Civil Service of the Federation, spoke on issues delaying the scheme in an exclusive interview with CLEMENT NWOJI AND ANTHONY OTARU. Excerpts.

What is the problem that after three months of expiration of the civil servants’ group life insurance, the Federal Government is yet to renew it?
Thank you very much. I will say that there is no problem; we are just going through some processes. Number one, you will recall that in February, we published an advert inviting insurance practitioners to apply and that took six weeks. After six weeks submission, it took us some time to process all their papers and after we had shortlisted those we wanted, we needed certificate of no objection from the Bureau of Public Procurement (BPP). If you want, I can show you documents we sent to the BPP and when we got a response from them. After the response was received, we had to write to the President, Mohammadu Buhari for approval. If you care, I will also show you the date we received that approval.

So, since the day we got that approval from Mr. President, we’ve continued with the processes of making sure that we perfect this thing 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. I don’t know where people got their information that it is lack of funds. But it is just some processes we are trying to conclude.

Yes, we know that this expired in August 12, 2016 or so, and that within the period between August 12 and now, there will be no cover. But there is a way we cover such situations. 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. So, we have not lost anything and as I am telling you now, we’ve concluded and we have presented to the Ministry of Finance and within a short period of time, the insurance people will be paid and we can start enjoying cover. Yes, we are aware of the policy of no premium, no cover. So as soon as we pay the premium, the cover will take effect.

And as for the refunds that we’ve been working on, we want civil servants to take maximum benefits of the insurance scheme. A situation where government will spend N6 billion to cover this scheme and civil servants will not benefit anything except those who died, and it is only their families will be those that will benefit, are the areas that we are thinking about so that some of those insurance companies who are ready to add some value for existing or living civil servants within that cover will continue to handle the scheme for us. It is just like you insure your car for a period of time, you don’t have accident, you don’t have any claim, don’t you get no claim benefits or no claim bonus? You do. So, those are the areas we are looking at, to make sure that government is not just spending money, but we can get value for the money government is spending on Group life insurance of civil servants. That is my position.

How much is budgeted for this, where is the money going to come from and how many insurance companies have you shortlisted for this scheme?
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 we can only work with those approved by the BPP and that approval had been confirmed by Mr. President.

What about the National Insurance Commission (NAICOM), which is the apex regulatory body of insurance companies, has it given assent to the number?
Well, NAICOM is regulating the industry. That is the insurance companies, the underwriters and brokers. They are the one registering them, they are the ones giving them their licences and they only act as adviser to the government agencies like the Head of Service. Their role ends with advisory. As long as we make sure that those we are using are those licensed by NAICOM, we think we have done due diligence. And they cannot and will not say that we have not consulted them. If you want, I can show you some letters we have written to them to confirm to us those on their list but up till now that we are talking; we have not received that list. But we are making use of what they published in the Newspaper as the list of approved underwriters.

So, when somebody is acting as an adviser, there is a limit to the advice. If you’re my adviser, you can give me some advice and I can take or leave some of that advice. It is my responsibility to make sure that I act in tandem with the law. The office of the Head of Service is aware of the law, and we are applying that to the letter. We have engaged with the highest authority of NAICOM and they cannot deny that. But our day to day running of that programme, I don’t think that anybody or any law said that we should leave that to NAICOM to do for us. If that is their expectation, I’m sorry I don’t share that view.

What if after the processes, you later discover that the licenses of the insurance companies chosen had expired and that they have not met the regulatory requirements NAICOM?
You see the regulatory requirements by NAICOM are subject to the certificates, you understand? I believe that NAICOM will not issue certificates to insurance companies that have not complied with their regulatory requirements. So, we are going by the certificates issued by the NAICOM and I can also give you a list of companies published in a newspaper by NAICOM of certified insurance companies. What more do we need to use to check?

The money you said that was appropriated, going by the economic recession the country is passing through, where is the government going to get the N5.4 billion from?
Well, we have written to the Ministry of Finance and they have not said that they don’t have the money. I believe that the government is very much interested in the welfare of the civil servants and it also knows the cost of non-insuring civil servants will be in case there are deaths, that you still have to pay. And you pay more if you don’t cover. So, I believe that one way or the other, the necessary agent of government will make the money available. And it is not a new thing, we’ve written to them, we are engaged with them, all that they are waiting is for us to bring the letter of no objection from the BPP and bring presidential approval, which we have got and forwarded to them. And I believe that in the next one week or a little more, we will get the money from government.

What is your reaction to the allegation that government does not pay premium on either assets or group life insurance?
This is my second time of coming into this office and I can tell you authoritatively that government has been paying premiums on insurance. It may come late sometimes, but we have been paying like the one that ended in August 2016, was paid in August last year. Before that, the previous one was also paid. In the case of insuring assets of government, we are in the process of insuring assets and we have asked for funds for that. Once it is released, we are going to insure government assets. You see insurance is actually to protect us against risks. In case of fire, death, crisis, you pull your funds so that you don’t feel the full effects of the nature of accident. You don’t need to pay at that time but instead, you pay in advance, you share the risk with others. That’s why we in the civil service will continue to advice government to continue to pay the premiums as at when due and when it cannot come on time, but as soon as it can.

You did say that you have requested for money for the renewal of insurance of Federal government assets. How much is it and do you think that the N5 billion requested for the Group life insurance will be sufficient?
Off hand, I will not be able to give you that but we know that there is budgetary provision for it and we are following up. You see, you cannot approach government with too many things at the same time. Let’s finish with the Group life insurance and then we can go into property.

Like I said, we have used N5 billion for three consecutive years. Yes, some insurance companies had asked for variation but we said no. Nigeria is not war, the rate of deaths is very low. So there is no reason for them to increase the premiums. In fact, what we are saying is that they either reduce the premiums like as I was telling you before we started that if I insured my car for three years running, and there was no accident and I’ve not made any claim, I should go to that insurance company to give me no claim bonus or no claim discount.

The same can apply in this case. In the past and outside Nigeria, Group life insurance is not just death benefits. There is other thing that goes with the death benefits. If you see that the claim is not very high, the responsible insurance company should be able to throw in one or two things, and either training or support for service delivery can come in.

How will you assess or rate the strength of insurance companies operating in Nigeria today?
You see, this is the area I expect NAICOM to be playing a major role. Are they checking claims settlement? We are checking it by ourselves. When I assumed duties here, I wrote to all the insurance companies that if they don’t pay claims in the past that they can’t be part of the present and future schemes. And we used that criteria to actually shortlist in the sense that if you have outstanding claims that you have not settled, you cannot be part of the new scheme being undertaken by us. So, we need to do a little more to make sure that these companies pay their claims as at when due.

And for the sake of the industry itself, they have that name that they need to protect, they believe that they just want to collect the premium but when it comes to settlement of claims, they look the other way. And I believe that the media have a role to play. You have been pressurising us asking why we are not paying premium. But have you done any investigative journalism to find out how the previous scheme was handled in terms of claims settlement?


Source: Guardian