Operators on renewed campaign for life insurance

The National Pension Commission and insurance industry operators are on an awareness drive for employers to voluntarily take group life insurance policy for their employees, NIKE POPOOLA writes

Employers are under statutory obligation to provide insurance cover for their employees. This is expressly stated in the Pension Reform Act 2004.

But very few people and organisations have complied with this directive. This has thus been a major source of worry to the insurance industry players and the regulators, National Pension Commission and National Insurance Commission.

Specifically, Section 9(3) of the Act states, "Employers shall maintain life insurance policy in favour of the employee for a minimum of three times the annual total emolument of the employee."

Experts say one of the benefits inherent in this cover is that a dependant will be paid three times the total annual emolument of a deceased worker. The money is expected to provide financial succour to the relatives.

According to the law, all Federal Government employees and private employers with at least five employees are mandated to get this cover with insurance companies.

While the law derives its legality from the PRA 2004, its administration is jointly supervised and regulated by the PenCom and the NAICOM.

Records from PenCom reveal that the compliance level has been growing slowly; a lot of employers have yet to comply with this provision.

According to the latest figures from the commission, about 2,219 employers have taken the cover for their workers as of the third quarter of 2013.

Figures from the commission showed that the number of institutions that submitted evidences of compliance with the GLIP actually increased.

Past records of the commission revealed that in 2011, a total of 632 organisations were able to submit certificates of compliance for the implementation of GLIP.

As of the third quarter of 2012, no fewer than 1,422 employers had submitted compliance certificates,

In the private sector category, PenCom has continued to request the firms to provide evidence of compliance with the GLIP.

In the third quarter of 2013, it said that the number of institutions that submitted evidence of compliance with GLIP increased from 54 in the second quarter to 81 in the third quarter, representing an increase of 50 per cent.

During the quarter, it added that the financial institutions maintained their lead among organisations that complied as the number of moved from 14 to 23.

PenCom said it had continued its sensitisation programmes and engagement of employers as part of measures to deepen compliance and implementation of the policy.

The Managing Director, Capital Express Assurance Limited, Mrs. Bola Odukale, said that the Nigerian insurance industry is now more vibrant, because supervision has become more stringent.

According to her, there were lots of benefits in getting adequate insurance cover for the workers.

She said, "Insurance is very key to the life of any individual or organisation because it backs you up when you run into trouble. We are exposed to all manners of risks. If a man dies, his wife is disturbed, the children cannot go to school, but with insurance, some money will be provided; it will help to mitigate the losses."

The managing director stressed that breadwinners should have an insurance cover in place to for their families; this would enable members of the family to move on with life ‘if the worst happens’.

The Acting Director-General, PenCom, Mrs. Chinelo Anohu-Amazu, said there was the need to enlighten the operators and relevant stakeholders on their roles towards a successful implementation of the policy.

According to her, the commission will continue to support and promote a collaborative approach that can address regulatory problems militating against the successful implementation of the policy.

Anohu-Amazu said PenCom would further take the operators through a number of activities for their deeper understanding of the rudiments of the GLIP as well as their responsibilities to other stakeholders on the policy.

She disclosed that PenCom and the NAICOM were currently collaborating to create the awareness about the policy.

The Commissioner for Insurance, Mr. Fola Daniel, said that as part of efforts to deepen the insurance penetration and provide adequate protection for workers, NAICOM and the Nigeria Labour Congress were collaborating on the implementation of compulsory group life insurance in Nigeria.

He explained the benefits of having the insurance cover for the workers when he led members of the management on a working visit to the President, Nigeria Labour Congress, Abdulwahed Omar, at the Labour House, Abuja.

Daniel said one of the cardinal functions of the commission was the protection of existing and prospective insurance policy holders in the country.

He stressed the benefits of GLIP under the Pension Reform Act of 2004 and urged the NLC to ensure their members, especially at the state and local government levels were adequately insured.




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