Don't Miss

1,412 employers give workers insurance cover

By on October 11, 2014

By the end of the 2013 financial period, 1,412 employers of labour had insured their workers under the Group Life Insurance Policy as prescribed by the National Pension Commission.

PenCom disclosed exclusively to our correspondent that the 1,412 institutions provided evidence of GLIP for their employers.

According to statistics on compliance with the GLIP made available to our correspondent by PenCom, the number of institutions that submitted evidences of compliance increased from 54 in the second quarter of 2013 to 81 in the third quarter.

During the third quarter, the financial institutions maintained the lead of complying organisations with 23 subscribing to the GLIP in place of the previous 14.

The Director-General, PenCom, Mrs. Chinelo Anohu-Amazu, said the commission intensified its compliance and enforcement activities with particular reference to the provisions of the section of the Pension Reform Act that required employers to maintain life insurance policy in favour of their employees for a minimum of three times the annual emoluments of the employees.

“The commission continued its sensitisation programmes and engagement of employers as part of measures to deepen compliance and implementation of the Group Life Insurance Policy,” she said.

Under the Pension Reform Act, 2014, the Federal Government removed the requirement for the presentation of letters of administration by relatives of deceased workers before they could claim the insurance benefits of their breadwinners.

Letters of administration is an official court order appointing someone as the administrator of a deceased person’s estate where no valid Will exists. An administrator derives his powers to act from the grant of the letters of administration, and where the letter is not granted, an administrator cannot act.

The Director-General, Nigerian Insurers Association, Mr. Sunday Thomas, said the decision to remove the requirement for letters of administration as a precondition for the payment of GLIP benefits was one of the amendments in the PRA 2014, which was signed into law on July 1 by President Goodluck Jonathan to replace the 2004 version.

According to him, the insurance benefits of deceased workers will no longer be transferred into their Retirement Savings Accounts with the Pension Fund Administrators, but will now be paid directly to the relatives of the workers by insurance companies.

“The decision of the government will make more people to now demand and get the insurance benefits of their deceased relations. Before now, many relatives of deceased workers had abandoned the quest to get the insurance benefits of their loved ones who died in active service due to stringent rules guiding the issuance of letters of administration,” Thomas said.

Insurance operators say the GLIP, which originates from the PRA 2004, does not allow the beneficiaries to have easy access to deceased workers’ claims when the need arises.

In the absence of a Will, the beneficiary must present the letters of administration, the process of which sometimes take years to get.

This impediment, insurers noted, had often discouraged relatives of deceased workers from demanding for the insurance claims when their breadwinners died.

Thomas said the presentation of letters of administration was not a requirement of the insurance companies but that of the PFAs.

“The delays that arise in transferring the benefits from the insurance firms to the PFAs when there are group life insurance claims and the demand for letters of administration have been removed. The provision of the insurance law regarding payment of claims is now being implemented, which means the main beneficiary will be paid directly and that reduces the delay that occurs in claims settlement,” he said.