The federal government has proposed N15 billion for payment of group life insurance of its employees.
The proposal was contained in the 2020 Appropriation Bill presented by President Muhammadu Buhari before the National Assembly recently.
According to the government, the N15 billion would be used to pay for Group Life Insurance for employees of all its Ministries, Departments and Agencies (MDAs), including DSS/insurance of sensitive assets, Youth Corps members and administrative monitoring.
Section 4 (5), of the Pension Reform Act, 2014 states that “every employer shall maintain a group life insurance policy in favour of each employee for a minimum of three times the yearly total emolument of the employee and premium shall be paid not later than the date of commencement of the cover.”
There had been reports that governments over the years had neglected payment of premium for its workers’ group life insurance despite the implementation of the ‘no premium no cover’ policy by insurance sector in January 2013.
Against this backdrop, families of many government employees who died in service were always denied their group life insurance entitlements.
Reports had also shown that where government paid the premium, it often does that in piece meal.
This year, the failure by the government to procure group life insurance cover for its employees almost one year running, gave the impression that the government had taken to self-insurance.
This meant that in the event of loss occurring, particularly death, the government would pay compensation from taxpayers’ money, a burden that could have been transferred to the insurers known to be professional risk bearers.
A former Chairman of Nigeria Insurers Association (NIA), Eddie Efekoha, said the delay, not only distorts the industry’s business plans, programmes and activities but also goes contrary to government’s promise of leading by good example in payment of premium for insurances of its assets and life cover for its work force.
He explained that the most disturbing part of it was that the delay was fast becoming the culture of the government, saying every year, instead of renewing contract with insurance firms concerned in January, the government would wait until last quarter of the year and when it pays, it is always parts.
He noted that in the course of the delay, some workers whose families were supposed to benefit from the compulsory group life insurance policy, lose their lives, raising the question on how government settles such dependents.