The Federal Government has released N3.5bn to life insurance companies as premium for the insurance cover of police officers in the country.
According to information made available to SUNDAY PUNCH on Friday by the underwriters, the sum was for the group life insurance cover for all police formations and commands for the 2013 financial period.
Although the premium is coming after the 2013 financial period, it will give financial succour to the dependants of police officers who lost their lives due to security challenges in different parts of the country while discharging their duties last year.
After much lobbying by the underwriters to have control over the fund, Custodian and Allied Insurance emerged the winner of the contract.
The firm is leading 21 other insurance firms to underwrite the risk in conjunction with 39 insurance brokers.
The Head of the Civil Service of the Federation, Goni Aji, had earlier said the sum of N11bn was budgeted for the insurance cover for the entire workforce of the Federal Government last year.
The amount, he said, would cover the premium on the insurance of members of the Nigeria Police and civil servants in all ministries.
The HOS said government prioritised the welfare of its employees and that the insurance cover was an encouraging one, especially for the families of deceased workers.
In 2008, the Federal Government introduced the Group Life Insurance scheme for its entire workforce with the first premium of N4bn.
Section 9(3) of the Pension Reform Act 2004, states that an employer shall maintain life insurance policy in favour of the employee for a minimum of three times the annual total emolument of the employee.
With the group life insurance cover, compensation is to be paid to the dependants of deceased workers.
Apart from attacks by armed robbers on police officers, Boko Haram insurgency in parts of the North has led to the death of many police officers.
However, delays in the payment of premium on the group life policy for police officers often subjects their dependants to undue hardship because of their inability to get claims.
While the underwriters have made known to the different Ministries, Departments and Agencies of government the ‘no premium, no cover’ policy, they have also started bidding for the 2014 insurance of the civil servants.
Section 50 of the Insurance Act 2003 states, “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.”
According to the law, any insurance operator who grants cover without having received the premium in advance or premium receipt notification from the relevant insurance broker, shall be liable to a penalty of N500,000 in respect of each cover granted, and in addition, that may be a ground for the suspension of the licence of the insurer.
Although the government is the biggest customer of the insurance companies with the largest premium, it has not been able to ensure the prompt payment of premium.
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH.
Contact: [email protected]