FEDERAL GOVERNMENT GROUP LIFE ASSURANCE SCHEME

BACKGROUND

The Pension Reform Act 2004 Section 9(3) makes it mandatory for all employers of labour in Nigeria, including the Federal Government and its Agencies, to maintain Life Assurance Policy in favour of their employees for a minimum of three times the total annual emolument of the employees. In compliance with the Act, the Federal Government flagged off the Group Life Assurance (GLA) Cover for its Employees in 2008, with retroactive effect from 1st July, 2004 when the Pensions Reforms Act was signed into Law, by appointing Insurance Companies and Brokers to provide Cover for its workers from 1st January to 31st December, 2008.

SCOPE

The Federal Government Group Life Assurance Scheme covers, Federal Public Servants (Ministries, Departments and Agencies), the Para-military (Nigeria Immigration Services, Nigeria Prisons Service, Federal Fire Service, Nigeria Security and Civil Defence Corps); Federal Road Safety Corps, Nigeria Drug Law Enforcement Agency (NDLEA) and Intelligence Community under the Office of the National Security Adviser.

MANAGEMENT

The responsibility of managing the Group life Assurance Scheme was assigned to the Office of the Head of the Civil Service of the Federation (OHCSF) which appoints Insurance Companies and Brokers to provide life Insurance Cover for all MDAs on an annual basis. However, in view of the time elapsed before the flag-off of the GLA, death benefits of Officers who died from 1st July, 2004 to 31st December, 2007 were processed as Backlog and paid through Annual Budgetary Provision from the Office of the Head of the Civil Service of the Federation under the Service-Wide Vote. For some reasons beyond control, there were also periods, even after the flag-off of the Scheme in 2008 when the Federal Government could not appoint Insurance Companies to provide Cover for its employees, death benefits of Officers that died during these periods are also processed and paid by OHCSF in accordance with the Act.

PROCEDURE FOR CLAIMS

For Next-of-Kin of a deceased Officer to benefit from the Insurance Claim under the Scheme, Desk Officers of affected Ministries, Departments and Agencies’ (MDAs) are expected to forward request for Death Claims of their deceased Officers directly to the appointed Insurance Companies/Brokers to enable the company process payment to the Next-of-Kin of the deceased Officers.

Where death occurs when there is no Insurance Cover, the Desk Officer is expected to forward a request for payment of Death Benefits to the Office of the Head of the Civil Service of the Federation for processing and payment to beneficiaries. Payment of Death Benefits to beneficiary is contingent upon the release ofunds by the Federal Ministry of Finance and on a First come, First Served Basis.

CLAIMS UNDER THIS CATEGORY OF THE SCHEME ARE REFERRED TO AS “BACKLOG”

In view of the fact that Insurance Policies are time bound, Desk Officers are required to report death of Officers to Insurance Companies as they occur, even before full documentation is completed by the MDAs to avoid non-payment of claims by Insurance Companies.

Request for either Insurance Claims or Death Benefits must be accompanied by all necessary documents including Certificate of Death and Three (3) Months Payslip proceeding the period of death, amongst others.

MONITORING

As part of efforts to ensure effective and efficient management of the Group Life Assurance Scheme, the Office of the Head of the Civil Service of the Federation embarks on routine verification exercise to MDAs of deceased Officers and also verifies payment of Death Claims by Insurance Companies to ensure Next-of-Kin of Officers are not short-changed. Most importantly, all payments are made to the Retirement Saving Accounts of beneficiaries to ensure that funds do not get to the wrong hands.

CHALLENGES

A major challenge to the successful implementation of the Group Life Assurance Scheme of the Federal Government is the undue delay by MDAs in reporting and processing of claims of employees who died in active service under the Group Life Assurance (GLA) Scheme of the Federal Government. In many cases, deaths are being reported sometimes after several years. This has created a lot of challenges and distortions in the smooth operation and administration of the Scheme for the Government, Insurance Companies and Brokers. As a result of this, many deceased Officers’ families have not been paid compensation envisaged in the Scheme, thus jeopardizing the objectives of the Scheme.

Another challenge is the lack of awareness of the Group Life Assurance Scheme of Government by many serving Officers and ignorance of the provisions of the Insurance Act, 2003 with respect to timeliness in processing of Insurance Claims by relevant Desk Officers in MDAs.

Inadequate budgetary releases for payment of Backlog of Death Benefits is also a major challenge for the successful implementation of the Scheme. However, efforts are being made to secure increased budgetary provision to cover the Backlog of death benefits.