2020 Budget: FG Proposes N15bn for Group Life Insurance of MDAs

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by Ebere Nwoji

The federal government has proposed N15 billion for payment of group life insurance of its employees.

The proposal was contained in the 2020 Appropriation Bill presented by President Muhammadu Buhari before the National Assembly recently.

According to the federal government, the N15 billion would be used to pay for Group life insurance for employees of all federal government ministries, departments and agencies including DSS/insurance of sensitive assets, Corpers plus administrative monitoring.

Section 4 (5), of the Pension Reform Act, 2014 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.

There had been reports that governments over the years had neglected payment of premium for its workers’ group life insurance despite the implementation of the ‘no premium no cover’ policy by insurance sector in January 2013.

Against this backdrop, families of many government employees who died in service were always denied of their group life insurance entitlements.

Reports had also shown that where government paid the premium, it often does that in piece meal.

This year, the failure by the government to procure group life insurance cover for its employees almost one year running, gave the impression that the government had taken to self-insurance.

This meant that in the event of loss occurring, particularly death, the government would pay compensation from taxpayers’ money, a burden that could have been transferred to the insurers known to be professional risk bearers.

A former Chairman, Nigeria Insurers Association(NIA), Mr. Eddie Efekoha, said the delay, not only distorts the industry’s business plans, programmes and activities but also goes contrary to government’s promise of leading by good example in payment of premium for insurances of its assets and life cover for its work force.

According to him, the most disturbing part of it was that the delay was fast becoming the culture of the government, saying every year, instead of renewing contract with insurance firms concerned in January, the government would wait until last quarter of the year and when it pays, it is always parts.

He noted that in the course of the delay, some workers whose families were supposed to benefit from the compulsory group life insurance policy, lose their lives, raising the question on how government settles such dependents.

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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