by Nike Popoola
The Federal government has paid about N1bn, which is about 25 per cent of the premium to provide insurance cover for its entire workforce for the 2012 financial period.
However, operators in the industry are worried about the delay in payment of the premium, even when the financial year is already getting over.
They are also worried because while claims had been mounting over the policy, they were still uncertain on when the remaining balance of the premium will be paid.
The group life assurance scheme in Section 9(3) of the 2004 Pension Reform Act, states that, employers shall maintain life insurance policy in favour of the employee for a minimum of three times the annual total emolument of the employee.
This compensation is to be paid by the insurance companies to the relatives of the worker who died while still in service.
In 2008, the Federal Government started this scheme for its entire workforce with a premium of N4bn.
The insurers are also worried because of the rise in claims from the federal group life policy, as a result of some top officials of the federal government, who also lost their lives when a Dana aircraft crashed recently in Lagos .
When the plane crashed, the Former Chairman, Nigerian Insurers Association, Mr. Olusola Ladipo_Ajayi, had said that by practice, the issue of no cover will not arise in this issue.
He said that since the group life started, the government had not been paying the premium as at when due but had always ensured that the premium was later paid and insurers had always been accepting the risks.
"It is no longer a legal issue for the insurance industry but a moral issue and the morality of the matter will override the legality. There are some clients that are in the habit of paying late and insurers collect their premium whether there has been a loss or not. There will be no dispute, it is only when dispute arises that they will say no premium no cover."
The former chairman noted that an insurer will always want to accommodate a major client who had always been paying his premium even when such transactions are usually delayed.
He said, "Since the customers have always observed the moral obligation of paying even for expired or past periods, insurance companies also exercise their moral responsibility by meeting such claims; it is moral decision that is based on commercial responsibilities rather than legal," he said.
According to him, the premium for the previous year was not settled before the commencement of the policy, but was later paid in full.
Source Punch
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