The House of Representatives, Tuesday resolved to look into the N35 billion insurance bill on insurance covers of fixed and non-fixed government assets in the 2015 appropriation.
The Green Chamber is to constitute 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.
The data is to include all premiums paid on group life and related government assets within the last three months.
Lawmakers further resolved to investigate the complicity of brokerage firms, Insurance and Reinsurance companies in the alleged multi-billion naira return on premium practice.
It will 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 the fraudulent process.”
The resolutions of the House was sequel to the passage of a motion under matters of urgent public importance by a member, Hon. Ossy Prestige (APGA-Abia) on the floor at plenary.
Prestige while moving the motion, noted that for every N10 billion paid as insurance premium by government, N5billion was returned to corrupt government officials.
His words: “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.
“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 bid.
“The unduly favoured companies reciprocate by engaging in a fraudulent practice termed Return on Premium.
“A percentage as much as 50 per cent of the premium paid by government is returned to government officials as cash pay back thus creating the biggest recurring fraud in the public sector.
“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.”
Prestige said if this alleged criminal practice was not checked, billions of naira meant for other pressing national needs, would continue to go into private pockets.
According to him, this practice will continue to effect the national economy adversely.
The motion was overwhelmingly supported when it was voted on by members.
Source: The Nation