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… 32 States Fail To Provide Life Insurance Cover For Workers



Meanwhile, about 32 states across the country have failed to insure their workers, leaving over two million civil servants in the affected states with no concrete group life insurance cover.

LEADERSHIP investigation revealed that as result, the families of the deceased civil servants in the 32 states are left to their own fate, as they are not entitled to death benefits claims meant to sustain the bereaved after the death of their loved ones.

A document released by the National Pension Commission (PenCom) listed the affected states to include Jigawa, Ogun, Kaduna, Delta, Zamfara, Kano, Imo, Kebbi, Sokoto, Ekiti, Kogi, Bayelsa, Nasarawa, Oyo, Kaduna, Akwa Ibom and Edo.

Others are Ondo, Benue, Kwara, Plateau, Cross Rivers, Anambra, Enugu, Abia, Ebonyi, Taraba, Bauchi, Borno, Gombe, Yobe and Adamawa States.

Market observers said non-adherence to this provision is exposing the families of their workers to imminent danger should anything happens to workers in the concerned states.

Group life cover is a joint regulation of the National Insurance Commission (NAICOM) and PenCom.
Section 9 (3) of the Pension Reform Act 2004 (now PRA 2014) requires every employer, to which the Act applies, to maintain life insurance policy in favour of the employee for a minimum of three times the annual total emolument of the employee.

The policy provides cover to the insured against Death, but with the PRA 2014 failing to prescribe sanctions for defaulters, state governments have cashed on this by evading life insurance of civil servants, especially now that some of them are to pay salaries of their workers.

LEADERSHIP investigation further revealed that, while life insurance companies have visited some of the defaulting states to persuade them to buy group life cover for their employees, most of them are not ready to bear this financial responsibility.

It was gathered that Lagos, Niger, Osun and Rivers States are the only four states that have implemented the group life insurance scheme.

The federal government is also defaulting in the group life insurance scheme for its 89,000 workers, just as the private sector boasts of about 90 per cent of the group life cover in the country.

Responding to the development, the Director General, Nigerian Insurers Association (NIA), Mrs Yetunde Ilori said unfortunately, what the PRA 2014 prescribes is that any employer who fails to insure his employees under group life cover should be a carrier of his own risk, hence, there is no compulsion.

This, she said, makes enforcement difficult, even as she called for a review of the section to make it compulsory for all employers of labour, including state governments to put in place group life cover for their workers.

While applauding PenCom for trying to enforce this provision through issuance of compliant certificates to complying employers as well as persuading federal government to make it one of the requirements to bid for its contracts, she said different states have been approached by life insurance firms, but nothing much came out of the engagement.

Ilori noted: “Yes, different states have been approached by life insurers but the enforcement is not like that of the Contributory Pension Scheme (CPS) because it just says that where there is no group life put in place, should there be any death, such employer should take up the responsibilities. I think that is an aspect that should be reviewed.”

Also speaking LEADERSHIP, the director, Centre for Pension Right Advocacy (CPRA), Mr. Ivor Takor, charged the unions in the public sector to rise up to the plight of the state workers by compelling state governments to insure the lives of their workers, adding that while fighting for salary increment, he said, the pension and insurance packages of workers should also be utmost.

“It is now obvious to everybody that the state governors cannot do anything for the welfare of the workers unless they are compelled to do it. So, if the public sector unions don’t get up and ensure they implement these things, those states will not do anything,” he stated.

Meanwhile, about 89,000 federal workers are currently without group life insurance coverage, as the insurance cover they have had expired since 2016.

LEADERSHIP findings revealed that the 2018 group life cover of ministries, departments and agencies (MDAs) is expected to gulp about N15 billion, which has been taken care of in the 2018 budget that is still before the National Assembly.

However, non-passage of the budget seems to have stalled the arrangement of the federal government to renew its insurance policies as and when due.

Consequently, the federal may have to wait until the budget is passed and appropriation made to renew the group life cover of its workers.

It was also learnt that even after necessary appropriation has been made, a late drama may ensue between insurance companies and the federal government over costing of the insurance coverage, as the premium budgeted for is lower than the prescribed pricing for group life policy released by the National Insurance Commission (NAICOM) earlier in the year.

With insurance industry implementing the no-premium-no-cover provision in section 50 of the Insurance Act 2003, which stipulates that premium must be fully paid for a cover to be activated, the workers are currently left with no appropriate insurance arrangement until government pays.

Group life insurance is a cover undertaken by the federal government through the Office of Head of Civil Service of the Federation on behalf of its federal civil servants for their protection against unforeseen circumstances, such as death and disabilities associated with industrial hazards while in active service.



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