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FG insures civil servants for N5bn

By on August 7, 2014

Life insurance firms have been paid about N5bn by the Federal Government as premium for the insurance of its workers in the 2014 financial period, investigation has revealed.

Some of the underwriters, who disclosed this to our correspondent, said the premium payment covered only civil servants, while the insurance of security personnel was being separately administered.

According to them, the insurance cover will lapse on December 23 this year, while the renewal is expected to commence.

The Managing Director, Capital Express Assurance Limited, Mrs. Bola Odukale, said the Group Life Insurance Policy would be beneficial to the federal workers, because in the event of death, the relatives of deceased workers would get some settlements to move on with their lives.

She also noted that the new Pension Reform Act, 2014 had also simplified the Contributory Pension Scheme and made the claims more accessible.

Under the present dispensation, Odukale explained that claims would be paid directly to the beneficiaries rather than the Pension Fund Administrators through whom the claims used to be paid.

The process, she noted, was a tedious one that made it hard for the beneficiaries to access their claims.

“Under the old Pension Reform Act, 2004, we used to pay to the pension operators and a lot of beneficiaries could not access it because they would ask them to produce letters of administration, which some may not get; but now, we pay to the named beneficiaries,” Odukale said.

The managing director said that workers should make sure that their insurance was tidied up by specifying who they wanted as beneficiaries who could access the claims in case of untimely death.

“It is also important for employers to enlighten their workers to always nominate their desired beneficiaries and those who can take care of their estate in case of untimely death,” she added.

According to her, the provision of insurance cover and removal of the bottleneck of the letters of administration will enable the claims to be released to the beneficiaries so that the children of deceased workers can continue with their lives and education.

Odukale said that the group life insurance policy would continue to be beneficial to workers in both the public and private sectors.

The Federal Government had earlier paid N3.5bn as premium to 21 life underwriters for the insurance cover of fallen police officers.

The premium covered the insurance of officers and men in all the police formations and commands in the country.

The Office of the Head of Civil Service of the Federation had over the years managed the scheme for all federal employees until the Nigeria Police Force and other security agencies broke away to individually manage their insurance schemes for their personnel.

The essence of the GLIP is to ensure that relatives of deceased workers are compensated with insurance claims to relieve them of some attendant financial burdens and help them to move on in life.

The GLIP originated from the PRA 2004. Section 9(3) of the Act states, “The employer shall maintain life insurance policy in favour of the employee for a minimum of three times the annual total emolument of the employee.”

 

 

[Punch]