Pencom: 29 states devoid of insurance for workers
According to the National Pension Commission, just seven states had group life insurance coverage for their employees as of the end of March 2022.
This means that 29 states did not have workers’ compensation insurance throughout this time period.
According to data acquired from PenCom on the ‘Summary of the implementation status of states having legitimate group life and sinking funds’ as of March 31, 2022, only Lagos, the Federal Capital Territory, Osun, Ondo, Edo, Ekiti, and Kaduna had workers covered.
“Kaduna substituted group life insurance with a sinking fund, which is domiciled at the CBN, and the state has begun setting aside cash in the account for the payout of death benefits,” the pension industry regulator explained.
The ‘Revised rules on group life insurance policy for employees’ were jointly produced by PenCom and the National Insurance Commission.
“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 must be paid not later than the date of beginning of the cover,” according to Section 4(5) of the Pension Reform Act 2014.
The annual total emolument is defined in Section 120 of the PRA 2014 as the gross emoluments of an employee or deceased person.
According to Section 57 of the Insurance Act, an underwriter would pay an employee’s entitlements to the named beneficiary if the employee died.
The section states that if an employee dies, the employer must immediately notify the insurance company and begin processing the death benefits claim on behalf of the deceased employee, as specified in the operational terms of the group life insurance policy, and in all cases, not later than 365 days from the date of the incident giving rise to the claim.
The employer will be obligated to pay the death claim from its resources if the employer fails to notify the insurance company of the employee’s death.
The PRA 2014 stipulates that “any employer that fails to maintain a group life insurance policy for the benefit of its employees is in violation of the PRA 2014.”
Mr Sunday Thomas, the National Insurance Agency’s Commissioner for Insurance, said the commission was working with states to ensure that obligatory insurance policies were enforced across the country.
He pointed out that one of the mandatory insurance policies under the country’s statutory provisions was group life insurance.
Dr. Zainab Ahmed, Minister of Finance, Budget, and National Planning, promised insurers that the Federal Government would ensure that mandatory policies were followed throughout the country.
“We’ve also taken a look at NAICOM’s Market Development and Restructuring Initiatives, which were created to promote mandatory insurance products and enhance penetration by enforcing compliance with group life insurance for civil and public officials,” she said.
“In addition, the government is deploying resources and engaging numerous stakeholders, including state governments, to guarantee that insurance laws are domesticated and the insurance sector in the states is improved.”
