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NNPC releases N2.36bn for 2015 group life insurance

By on May 10, 2015

In line with the ‘No Premium, No Cover’ policy of the National Insurance Commission (NAICOM), Nigerian National Petroleum Corporation (NNPC) has paid the sum of N2.36 billion for its employees’ group life insurance for 2015, BusinessDay investigation reveals.

The payment, which analysts say is a demonstration of the corporation’s commitment to National Content Development policy, has NSIA Nigeria Limited, formerly ADIC Insurance Limited, as the lead underwriter.

The policy which commenced last month is in addition to N14.6 billion paid out as premium for its consolidated assets for 2015, with Mutual Benefits Assurance as lead underwriter.

Section 4 (5) of the Pension Reform Act 2014 stipulates that every employer, to which the Act applies, shall maintain a group Life Insurance Policy in favour of the employees for a minimum of three times the annual total emolument of the employee.

A document accessed by BusinessDay reveals that nine insurance companies doing life business are participating in the risk with total sum assured put at N4.14 billion.

NSIA is taking 23.5 percent of the risk while Custodian & Allied Insurance and Leadway Assurance are taking 16 percent each.

Five other insurance companies including Niger Insurance, Royal Exchange, Mansard Insurance, Union Assurance
and Cornerstone Insurance will get 8.5 percent each, while Zenith Insurance gets 2 percent.

An insurance CEO whose company is one of those participating in the NNPC life risk for the current year said though the contract is commencing in second quarter it is worth the while because it is cash backed.

“We can only be grateful to the National Insurance Commission (NAICOM) for enforcing ‘No Premium No Cover’ in the insurance industry, because it has made the business more fruitful because we get our payment at the point of taking the risk”.

The CEO said NNPC has also shown strong commitment to National Content Development as far as insurance is concerned.

The corporation, it would be recalled, had also last month paid out N14.6 billion as premium for insurance of its consolidated assets for 2015, with Mutual Benefits Assurance as lead underwriter.

Paschal Egerue, CEO, Enterprise Risk Insurance Brokers Limited, said the NNPC should be commended for complying with the policy on ‘No Premium No Cover’ terms of insurance. This will not only boost confidence, it will bring stability and enhance claims payment process, Egerue stated.

According to him, it will also mean a signpost for other corporate organisations because that is the only way insurance can deliver value and create wealth in the economy.

Egerue noted that NNPC given its vantage position in the economy should build local capacity through democratisation of bids and appointments of brokerage firms.

“Every broker should be given an opportunity. In that process, people are learning and capacity is developed”, he observed.
[Business Day]