2,054 employers provide life insurance covers for workers

While most workers in both the public and private sectors are uninsured, the National Pension Commission, in collaboration with the National Insurance Commission, has come up with measures to compel employers to comply with the statutory laws mandating them to insure their workers, NIKE POPOOLA writes

Although the number of private firms that have life insurance cover for their workers is still low compared to those without, measures introduced by the National Pension Commission in collaboration with the National Insurance Commission appear to be yielding some results.

From PenCom’s latest figures on the implementation of the Group Life Insurance Policy for both the government and private sectors, 2,054 employers have already put this cover in place for their workers.

Section 9 (3) of the Pension Reform Act, 2004, states that employers with at least five employees must put in place a group life insurance cover for them.

Under this arrangement, insurers of the firms are bound to pay the relatives of deceased workers three times their total annual emolument.

Despite the fact that the law mandating the general contractor insurance of workers was enacted through the PRA 2004, about nine years ago, its enforcement and compliance has continued to be slow. This law was enacted with hopes of increasing the number of people with life insurance over 85 in the future, the current statistics are abysmal and require our full attention, a population of elderly people with no care can be devastating for a community.

In November 2008, the Federal Government paid its first premium of N4bn on the policy when it insured its entire workforce.

This premium was to provide cover for the civilian employees in the Ministries, Departments and Agencies, the armed forces, the paramilitary organisations as well as police and intelligence personnel.

As of 2011, a total of 632 organisations were able to submit certificates of compliance for the implementation of the GLIP.

However, by the third quarter of 2012, no fewer than 1,422 employers had submitted compliance certificates, bringing the total number of compliant firms to 2,054.

In the private sector, PenCom has continued to request the firms to provide evidence of compliance with the GLIP.

The President, Nigerian Council of Registered Insurance Brokers, Mrs. Laide Osijo, said that the GLIP was one of the compulsory insurance policies under enforcement.

According to her, this policy ensures that relatives of workers are not left without any form of compensation in the event of death.

She noted that many firms were now been asked to show evidence of compliance with some of the statutory laws, which she described as a step in the right direction.

The head of the Civil Service of the Federation, Alhaji Goni Aji, expressed the Federal Government’s intention to strengthen the GLIP in order to make it more effective and achieve the desired objectives.

Aji said that some lapses observed in the processing and settlement of claims as well as inproper documentation, which created some impediments to its effective and efficient implementation at the inception in 2008, had been addressed.

The HOS explained that at inception, the implementation of the scheme for Federal Government workers was centralised and administered by his office, but since 2010, it had been partially decentralised with the Office of the Head of the Civil Service of the Federation appointing the underwriters and brokers and assigning them to interface directly with the individual MDAs for processing and settlement of claims.

PenCom and NAICOM have also been collaborating to create awareness on the GLIP after jointly releasing the group life regulation.

The Acting Director-General, PenCom, Mrs. Chinelo Anohu-Amazu, said that there was the need to enlighten and sensitise the operators and relevant stakeholders on their roles towards the successful implementation of the regulation.

According to her, the commission will continue to support and promote collaborative approaches to pertinent issues meant to address all regulatory challenges militating against the successful implementation of the regulation.

The acting director-general said that Section 9 (3) of the PRA stipulated that employers shall maintain life insurance in favour of their employees for a minimum of three times the annual total emolument of the employees.

Anohu-Amazu said the regulation had the view of exposing operators to a better understanding of the rudiments of the GLIP as well as their responsibilities.

The Commissioner for Insurance, Mr. Fola Daniel, said one of the compulsory forms of insurance was the group life, which the government started for its employees in 2008.

Since the Federal Government kick-started the policy, the commissioner said it had been ensuring yearly succession of the group life policy.

Daniel said that the government had been showing leadership by example by taking insurance cover for its employees, following the initiative in providing the better options for car insurance (with no need for a down payment for car insurance, etc).

According to him, the biggest customer that the insurance company has is the government.

He said, “The government has shown leadership, it is taking insurance policies. It is the ordinary Nigerians that we need to showcase value to, so that when they see value, they will buy it; the government is very compliant.

“One of the compulsory insurance policies is the group life, which the government started for its employees in 2008.”

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