HEAD of the Civil Service of the Federation, HOCSF, and the Bureau of Public Procurement, BPP, have selected 20 underwriters and 108 insurance brokers to take on N5.4billion group life of the Federal Government.
Vanguard exclusively gathered that the insurance companies were selected based on their track records, claims settlement profile, and other criteria.
The operators for the government group life insurance were picked in compliance with Section 4 (5) of the Pension Reform Act, 2014 which states that “every employer shall maintain a group life insurance policy in favour of each employee for a minimum of three times the annual total emolument of the employee and premium shall be paid not later than the date of commencement of the cover.
According to the Permanent Secretary, Common Services Office in the OHCSF, Mr. Yemi Adelakun, the current Group Life Scheme has not been in tune with global best practices and as such, failed to benefit civil servants across the federation as expected.
He also said the only benefits civil servants received from group life scheme was death benefit, whereas it could be extended to accidents, disabilities, residual benefits and other ancillary services.
Adelakun, under whose purview Group Life Insurance Scheme falls, explained that government would review the current Group Life Assurance Scheme from an annual policy to a long term policy for effectiveness and efficiency in order to address these drawbacks, enhance the benefits derivable from the scheme and bring the Group Life Insurance Policy in line with global best practices.
He said: “It is usually N5.4 billion annually for civil servants Group life insurance. That’s the figure and that had been recurring for the last three or four years. For this current one, I think we shortlisted 21 insurance companies, but the BPP gave us certificate of no objection for 20 and 108 insurance brokers.
‘’We can only work with those approved by the BPP and that approval had been confirmed by Mr. President.” On how the premium would the funded, he said: “After the response was received, we had to write to Mr. President for approval. So, since the day we got that approval from Mr. President, we’ve continued with the processes of making sure that the perfect thing is done before we present to the Ministry of Finance for payment.
‘’There is money for it, it is in the appropriation and nobody had told us that there is no money to pay for it.”
Adelakun told Vanguard that he understood the dangers delayed premium posed to civil servants but admitted that the government would rise to the occasion and cover such situation.
He, however, expressed belief that selected insurance companies would give the federal government discount for having paid the same premium for the past three to four years. Or better still, add value to the policy.
He said: “The Federal Government will now make sure that if there is any death within that period, it will be direct payment to the beneficiaries of those people.
‘’So, we have not lost anything and as I am speaking with you now, we have concluded and have presented to the Ministry of Finance and within a short period of time, the insurance people will be paid and we can start enjoying cover.
‘’Yes, we are aware of the policy of no premium, no cover. So as soon as we pay the premium, the cover will take effect.
“We want civil servants to take maximum benefits of the insurance scheme. A situation where government will spend N5.4billion to cover this scheme and civil servants will not benefit anything except those who died, will not happen again.
“It is just like you insure your car for a period of time, you don’t have accident, you don’t have any claim, and don’t you get no claim benefits or no claim bonus? You do. So, those are the areas we are looking at, to make sure that government is not just spending money, but we can get value for the money government is spending on Group life insurance of civil servants. That is my position.”
He, however, stated that the federal government would soon resume the insurance of government assets which, he said, had not been renewed for a while.
“I can assure you that we are conscious of the importance of insuring government assets and we will resume that soon,” he said.
Adelakun maintained that the relationship between the Office of the Head of Service and the insurance regulatory body, National Insurance Commission (NAICOM), had been cordial, pointing out that the role of NAICOM, as the apex regulator of the insurance sector and adviser to the government agencies on insurance matters, began and ended in advisory capacity.