The world of employee insurance and the payment of pension benefits in Nigeria (especially in the public sector) is shrouded in lots of misinformation and bureaucracy such that the average Nigerian worker is not sure if he has an insurance or pension plan in place. However, it seems that hazy world of workers' insurance and pension plans is about the get a new lease of life in 2015, at least for Federal Government workers.
According the Pension Reform Act, 2014, “Employers shall maintain life insurance policy in favour of the employee for a minimum of three times the annual total emolument of the employee.” The life insurance policy ensures that the beneficiaries of federal civil servants who die while in service are paid a substantial amount that could lessen the blow and make it easier for them to pick up the pieces of their lives.
It seems that the Federal Government is taking the lead in ensuring that employers pay up the insurance premiums of their employees. News has it that the Federal Government is on track to pay N6 billion as premium to underwriters providing insurance coverage to civil servants in the current fiscal year.
I have a strong feeling that the Federal Government will follow through on the decision to pay N6B as premiums because the payment of premiums is a prerequisite for issuing the receipt of an insurance premium. According to section 50 of Insurance Act, 2003, “The receipt of an insurance premium shall be a condition precedent to a valid contract of insurance and there shall be no cover in respect of an insurance risk unless the premium is paid in advance.”
In addition, the "no premium, no cover" regulation of the National Insurance Commission is a proactive step towards ensuring that the government pays the premium or be liable to pay for the compensation when civil servants die while in service.
Simpler Claims Procedure
As much as nobody prays for the death of a loved one especially when they are still in the prime of life and in active service, we cannot discountenance the fact that the Pension Reform Act of 2014 has simplified the procedures for making claims.
Before the reformed pension act, the Pension Reform Act, 2004 required insurance companies to pay to Pension Fund Administrators. However, the beneficiaries often have a hard time getting access to the money because the Pension Fund Administrators would be asking them to produce different documents to satisfy the bureaucracy monster.
However, under the new act, insurance claims will be released directly to named beneficiaries of the deceased in order to reduce bureaucracy and to ensure that they are able to access the funds speedily.
Image Credit: http://www.willardinsurance.org/
No comments:
Post a Comment