The Managing Director, LASACO Assurance Plc, Mr. Olusola Ladipo-Ajayi, has suggested the prosecution of employers who failed to provide group life insurance cover for their employees.
Ladipo-Ajayi, who stated this at the Insurance Industry Consultative Forum (IICC) conference in Abuja, recently noted that no one has been prosecuted for non-compliance to group life insurance, despite the new Pension Reform Act, 2014 which stipulated severe sanctions for employers that fail to take up life insurance cover for their employees.
He said the PRA 2004 provides that “every employer shall maintain a Group Life Insurance policy in favour of each employee for a minimum of three times the annual emolument of employees and that premium shall be paid not later than the date of commencement of the cover.”
He also said section 6b of the Act equally states that an employer that fails, refuses or omits to make payments when due shall be liable for payment of claims arising from the death of such employee for failing to arrange life Insurance cover, he added that this provision has not only helped to reinvigorate the work force within the industry, but has also enhanced profitability.
He however, regretted that majority of the employers in the private sector have not been adhered to the law.
According to him, “It is my recommendation that there should be more effective monitoring/control by the regulators against defaulters.
For instance, no legal action has been instituted against employers that fail to take group life Insurance policy for their staff. Violators of the law should be sanctioned to discourage others from defaulting.
The enforcement of the six compulsory insurances will certainly help in deepening the market.”