Govt may opt for self insurance this year

President Goodluck Jonathan

·         Insurers lose N11bn group life premium last year

Chuks Udo Okonta

The uncertainties surrounding the nation’s budget may push the Federal Government to carter for its workers risks this year, even as last year’s group life premium which was put at about N11 billion has remained unpaid.

Government’s Ministries, Departments and Agencies (MDAs), would have returned their unspent funds to the treasury as they were mandated to do so on or before December 31, last year.

Going by the submission of this year’s budget to the National Assembly just few days to the end of last year, it is expected that the budget would not be implemented until the second quarter of the year, making it impossible for MDAs, to effect insurance of workers.

Experts said with the No premium No Cover rule, government has the option to adopt self insurance or abide by the new policy regime which effects cover immediately the premium is paid.

An operator, who pleaded not to be named, said the government in the past had had cause to provide insurance for its workers, adding that the government may consider such step this year to enable it resolve the insurance problem which started last year.  He added that though the decision is inimical to the growth of insurance, it remains of the options opened to the government, if the risks of workers are to the insured.

He said underwriters would never compromise their position or do anything that would subvert the new premium law, adding that it behooves the government to set a new template for payment of workers premium.

A broker who also spoke with Inspen, said the way out of the present insurance budgetary impasse, is for MDAs to move their renewal period from January to April ending or June.

She said: “Earnestly, government is the highest spender and they are to promote the insurance industry. What the government should do because of delay in implementation of the budget is for most agencies to move their renewal period from January to April ending or June. If they do that, they would have enough time, after the budget is released to get their premium.”

She urged the Commissioner for Insurance Fola Daniel to take up the issue with the Permanent Secretaries and the legislators.

“We believe the issue should also be discussed with the legislators to encourage government to place insurance first in the budget. The new premium payment and collection policy is a good thing in the right direction for it pays the brokers, underwriters and public better. With the policy, once the public pay the premium, their claims, will be settled promptly,” she said.