By Chiamaka Ajeamo [email protected] 08060655687
The National Pension Commission (PenCom) has said that despite its numerous measures and efforts towards ensuring all states in the country comply and implement the group life insurance policy for their workers, only five states including the Federal Capital Territory have valid group life cover for employees.
According to the Commission’s fourth-quarter 2020 report released recently on its website, only Lagos, Osun, Edo, Ondo and FCT out of the 36 states in the country have complied with the law on group life.
Earlier last year, to ensure that workers have life insurance cover, PenCom advised defaulting states to obtain adequate group life policy for their workers, even as it also directed employees to report any employer that fails to procure the minimum required life insurance policy on their behalf not less than three times their annual total emolument.
PenCom in a notice: ‘Re Compliance with guidelines for life insurance policy for employees and submission of insurance certificate for 2020’ stated that it is the right of all employees in the public service of the Federation, Federal Capital Territory and States that have implemented the Contributory Pension Scheme (CPS) as well as private sector, under Section 4(5) of the Pension Reform Act (PRA) 2014 to have life insurance policy taken on their behalf by their employers for an insured amount of not less than three (3) times their annual total emolument.
The Commission further implored employees to bring to its notice, where the employer fails to: “submit the evidence of compliance with life insurance policy and place the certificate in a conspicuous place within the organisation.”
PenCom noted that in accordance with the provisions of Section 4(5) of the PRA 2014 and Section 5.5 of the guidelines for life insurance policy for employees, employers of labour covered by the PRA 2014 are required to submit copies of the insurance certificates with the schedule of benefits to the National Pension Commission.
Available data revealed that over 2.5 million civil servants in the country are missing out of the benefits of group life insurance cover, following the inability of 32 states to sign on to the policy, against the mandate of Pension Reforms Act (PRA) 2014.
Speaking on this development in a report, the Director, Centre for Pension Rights Advocacy (CPRA), Ivor Takor, urged the unions in public and private sectors to rise up to the plight of workers by compelling employers to insure their lives.
According to Takor, while the labour unions are fighting for salary increment, the pension and insurance packages of workers should also be part of their demands.
“It is now obvious to everybody that the state governors, among others, 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 said.
Also commenting on the development, the past President, Nigerian Council of Registered Insurance Brokers (NCRIB), Shola Tinubu, called on employers to own up to the responsibility of insuring their workers, as this may also motivate their employees to be more devoted to their roles and duties.
It is worthy to note that the Group life insurance cover is a joint regulation of the National Insurance Commission (NAICOM) and PenCom, in Section 9 (3) of PRA 2014, requiring every employer, to which the Act applies, to maintain life insurance policy in favour of their employee(s) for a minimum of three times the annual total emolument of the employee.
According to the guidelines of the policy, jointly issued by NAICOM and PenCom, it is required that an employer shall fully bear all costs in relation to the procurement of this policy, and this shall be in addition to, and separate from, the contributions to be made by the employer to each employee’s Retirement Savings Account, as required by the Act.
Also, the policy shall be effected through the purchase of a life cover issued by a Nigerian registered insurance company, licensed and authorised to conduct life insurance business by the NAICOM under the insurance Act 2003.
On the policy coverage, the guideline stipulates that the policy shall provide cover to the insured against death. This coverage shall be for twelve (12) months, from January through December, and shall be renewable at the end of each coverage year.
In addition, the premium payable on the policy shall be pro-rated as applicable where an employee joins the scheme in the course of the year and where an employee leaves the service of the employer before the expiration of twelve (12) months, the premium paid relating to the unexpired period, shall be returned/set aside to the credit of the employer.
The guideline also stated that insurance cover is mandatory for all employees as long as they are in employment and insurers shall be expected to ensure that employers comply with the minimum insurance cover of three times the annual total emolument of each employee.
The Nigerian Council of Registered Insurance Brokers (NCRIB), concerned about the low adoption of group life insurance policies in states of the federation, noted it had reached out to state governments educating them on the importance of obtaining this policy for their workers.
Reacting on this issue, in a media report, the Executive Secretary, NCRIB, Fatai Adegbenro, stated that the Council had written to all the state governors on the need for them to mitigate their risks through insurance.
Adegbenro stated that he was optimistic that the present situation where only a few states have group life for workers will change soon as many states will adopt the policy, adding that the various state charters of the NCRIB have been keenly following up with their states to ensure they protect their workers and properties with insurance.
