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Chuks Udo Okonta
The word ‘The solution to a problem is a problem’ can
be best used to describe the provision on Sec 4(6) of
the Pension Reform Act (PRA) 2014, which has put the group life assurance at
the discretion of employers, a development that is presently causing apprehension
among insurers.
Although Sec 4(5) of PRA 2014, mandated every
employers to have group life insurance policy in favour of each employee, Sec
4(6) PRA 2014 which reads: “Where the employer failed, refused or omitted to
make payment as at when due, the employer shall make arrangement to effect the
payment of claims arising from the death of any staff in its employment during
such period” seem to have created a window for employers to do away with
insurers and carter for the settlement of their employees after their death.
Experts, who have observed the gap, said the provision
on Sec 4(6) PRA 2014 is a great threat to
group life business as some employers may hind under it to do away with
insurers and make arrangement for their staff after their demise.
They said the provision Sec 4(5) of PRA 2014
would have been left to stand with no exception created Sec 4(6) PRA 2014.
They expressed worry over the continuous loss
of insurance businesses, adding that if adequate measure is not taken, group
life which has been a major chunk of insurance business and yields good premium
to the industry may be taken away, as crafty employers may take advantage of the
gap.
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