By Christiana Ekpa
The House of Representatives on Wednesday moved to conduct a forensic probe into the over N30bn unsettled claims in the group life insurances of the Nigeria Police Force, Head of Service and Ministry of Defence.
The unsettled claims were a result of a lack of owing actuarial valuation, gap analysis, and non-compliance with Section 57 of the Insurance Act, 2023, and Section 4, Subsection 5 of the Pension Reform Act, 2014, among others.
The House resolution of the House followed the adoption of a motion titled, “Breaches and Other Infractions of some Federal Government Institutions on Insurance and Actuarial Matters using forensic auditors moved by the member representing Gummi/Bukkuyum Federal Constituency of Zamfara State, Mr Sulaiman Gumi.
Speaking in favour of the motion, Gumi noted that while conventional insurance is struggling with outdated insurance laws, there is a dearth of professional loss adjusters and irregular payment of loss adjusters fees, non-remittance of premiums, especially to reinsurers, lack of innovation and inconsistent government policies within the insurance industry.
These and a lack of cooperation within the insurance industry coupled with poor governance issues in the industry as well as weak regulatory bodies as a result of moribund laws, lead to the failure of many banks, especially microfinance banks, he added.
He also identified the failure to collaborate effectively with the Central Bank of Nigeria and the Assets Management Company of Nigeria to secure financial stability in the Nigerian economy and the cumbersome process of failure resolution and reimbursement of depositors, as some of the challenges facing the industry.
He said, “The House is concerned that non-transparency and lack of accountability in insurance practice in Nigeria today have resulted in over N30bn unsettled claims in the group life insurances of the Nigeria Police Force, Head of Service (for Federal Civil Servants), and Ministry of Defence (for the Nigerian Armed Forces) because of no actuarial valuation, no gap analysis, and non-compliance with Section 57 of the Insurance Act, 2023, and Section 4, Subsection 5 of the Pension Reform Act, 2014, among other factors;
“We are aware that over $1bn that should have been retained in Nigeria if all insurance practitioners are given the option of the right of first refusal (insurance being more about risk bearing and sharing) is being taken abroad, which affects the nation’s economy, thereby always weakening our insurance sector and depleting our foreign reserve.
“These breaches and infractions have given rise to excessive cession and retrocession of businesses in breach of the Local Content Act to the extent that 90 per cent of the risks of some Federal Government organisations are placed outside the country.”
He added the effect of this development “Has led millions of families of the deceased Federal Government’s personnel that are the beneficiaries suffering because they were not paid the entitlement of their breadwinners.”
