The Nation Newspaper

Category: Insurance

  • Dana Air crash: ‘Only two families of victims are fully paid’

    ONLY two families of the victims of the crashed Dana Air have been paid the balance of $70, 000, Controller, Claims of the airline’s local insurer, Prestige Assurance Plc, Mrs Josephine Gbuji, has said.

    The payments were made based on the advice of the lawyers, Clyde & Co, who are represented by Yomi Oshikoya & Co.

    She said aviation insurance requires foreign backing to accommodate the magnitude of the losses, adding that local insurers lack the capacity to do so.

    Mrs. Gbuji told The Nation that her firm had paid the initial $30, 000 each to 81 families of Dana Air crash victims as at January 31, 2013.

    “We have paid every passenger’s family who has come forward and have been able to prove their title the initial amount of $30, 000. From my own record, we have paid 81 families out of the lot; two passenger’s families have been paid the balance of $70, 000.

    “This was after the two families got the letters of administration duly confirmed by the lawyers and they advised us on that,” she said.

    According to her, the lawyers are in charge because there are many issues involved in confirming who the bereaved representatives of the passengers are.

    She said the process was more rigorous for the balance of $70, 000, adding that the insurance company did not determine who collects what.

    “The lawyers have to be thorough because if they do not do it well, there will be law suits later and they too would be held liable,” she said.

    Mrs. Gbuji said nine families of beneficiaries, who were confirmed to them by the lawyers, got their cheques for $30, 000 on the 30th day after the crash happened, in conformity with international aviation laws, adding that the cheques were issued and sent to the lawyers who would disburse to the beneficiaries to ensure they got proper discharge.

    “We have our funds here. So, each time we have advice, we issue cheques to those cleared. The cheques are written exactly the way the lawyers instructed,” she said.

    However, an official of Yomi Oshikoya & Co, the representative law firm of Clyde & Co in Nigeria, said the lawyers were not disposed to discussing the issue with the press.

    According to her, the firm is dealing with the solicitors to the beneficiaries of the airline crash victims. She refused to talk on the fate of those affected on ground.

    This is because apart from the initial ‘hand outs’ to cushion the effect of their immediate losses, none of them has been paid any claim by the insurance firm.

     

  • NAICOM, PenCom collaborate on annuity, group life policy

    NAICOM, PenCom collaborate on annuity, group life policy

    The National Insurance Commission (NAICOM) and the National Pension Commission (PenCom) are working with other relevant stakeholders in the industry to implement the provision of the annuity and group life insurance policy in the contributory pension scheme.

    The regulators, last week held a workshop in Lagos, tagged: “Towards effective annuity and group life insurance regulation in Nigeria.”

    PenCom’s Acting Director-General, Mrs Chinelo Anohu-Amazu, said the strategy is meant to carry relevant parties along in resolving pertinent issues and to address any regulatory challenges militating against the successful implementation of the scheme.

    She said the Pension Reform Act allows a retiree to utilise the balance standing to the credit of his Retirement Savings Account (RSA) for either programmed withdrawal through the Pension Fund Administrator (PFA), or annuity for life purchased from a life insurance company.

    “Section 9 sub-section 3 of the PRA 2004 requires employers to maintain a life insurance policy for its employers for at least three times their annual total emoluments.

    “It is the mandate of NAICOM to regulate the annuity and life insurance markets. It is the responsibility of PenCom to ensure that the modalities for the administration of retirement benefits through life annuity as well as terminal benefits involving group life insurance policy are strictly followed to guarantee payments as and when due,” she said.

    The helmsman said since the take-off of the payment of retirement benefits to retirees who opted for annuity, no enlightenment aimed at creating awareness of annuity was carried out.

    Speaking on different procedures guarding the operations of the annuity, which he described as a programmed payment for life, the Assistant Director, Inspectorate, NAICOM, Sam C. Onyeka, said there are many provisions, which operators must obey for the benefits to be realised.

     

     

     

     

  • ‘Why transfer window has not started’

    ‘Why transfer window has not started’

    The transfer window that wouldenable holders of two pension accounts to transfer funds has not started because of identification management problem, the Managing Director, Leadway Pensure PFA Limited, Mrs Ronke Adedeji, has said.

    She told The Nation that though a lot of work has been done on it, the scheme is yet to take off because there are still quite a lot that need to be done to make sure it is error free.

    She said: “The transfer window is a very complex exercise, though from the surface it looks a very simple thing. It is complex because when you move an account from one Pension Fund Administrator (PFA) to another, identification process becomes a problem. What we want to ensure is that when you are transferring someone’s account from one PFA to another, you are transferring the correct account and not another person’s account simply because they have similar names.

    “Biometric is very key here, proper identification process is very important. In the country we have identification problem, this is essentially what is hindering the take-off of the scheme,” she said.

    The Leadway boss said in most developed countries, proper identification is simple. She , however, lamented that it is still a problem and that it is affecting the take-off of the transfer owindow.

    She said until the biometric is right, the issue may still drag on, adding that the pension commission and the operators are doing a lot to see how soon it could start.

    Adedeji said the pension fund operators were looking at options that would guarantee that at the end of the day, a flawless system was in place.

    The other problems militating against the smooth take-off of the scheme was lack of proper software and data bank, adding that a lot of work still needed to be done.

    She said the pension fund operators, the government and other relevant stakeholders might end up collaborating on the biometric to ensure that a workable system was put in place.

    The Managing Director, Legacy Pension Managers Limited, Mr Misbahu Umar Yola, said it is a misnomer to talk about one person having two retirement savings accounts. This, he said, was possible in Nigeria because of unreliable data base.

    He said: “It is an aberration that we should be talking about one person having two PFAs. If the system had worked well right from the outset, the moment your finger print is imputed in the process of creating a second PFA, the system would have alerted that you have an existing one, and the second one would have been rejected but that had not been the case because the system failed to work well.’’

    On pensioners who want to collect another 25 per cent from the retirements savings after the first 25 per cent lump sum had been paid, he said it is not possible because the position of the pension law is very clear about that.

    She said the 25 per cent is paid once to the account holder after retirement while the balance is managed on terms agreed to by the parties.

  • ‘Weak infrastructure, ICT application, others retard growth’

    ‘Weak infrastructure, ICT application, others retard growth’

    Operators in the insurance industry have identified weak infrastructure and low application of information communication technology (ICT) as some of the challenges that are impeding the growth in the industry.

    They argue that unless these challenges are tackled, efforts to deepen insurance penetration and increase its contributions to the nation’s gross domestic product (GDP) will never make the desired impact.

    The Group Managing Director, Mutual Benefits Assurance Plc, Mr Akin Ogunbiyi, also another problem is the dearth of affordable insurance products for clients.

    “If we really want to increase insurance penetration in this country, we have to look at the products and services that the common man can benefit from, to meet his needs, creating value for them and making it affordable,” he said.

    Assistant General Manager, Corporate Communication and Brand, Sovereign Trust Insurance Plc, Segun Bankole, said the untapped potentials in the Life segment of the insurance industry is very large and a lot of Nigerians are beginning to see the positive benefits of taking up the policy.

    He said Sovereign Trust is achieving a record 25 per cent increase in their market penetration every year. He said the SWIS – F POLICY, which his company offers Nigerians, has a lot of benefits. If during the period of insurance, the insured sustains bodily injury solely and independently of any other cause by accidental, violent, external and visible means resulting in death or disablement, the Company pays compensation or in the case of death, to his legal representatives.

     

     

     

     

  • PenCom, PenOp set to tackle unclaimed retirement benefits

    PenCom, PenOp set to tackle unclaimed retirement benefits

    THE National Pension Commission (PenCom) and the Pension Fund Operators (PenOp) are to address the problems of unclaimed retirement benefits of retirees.

    PenOp’s President, Dave Udeanu, said some retirees have refused to collect their benefits from their Pension Fund Administrators (PFAs), adding that the development has made operators to intensify efforts at locating them and their families without success.

    He said operators would continue to educate the public, adding that the challenge cannot be tackled overnight.

    Worried by this development, PenCom has directed PFAs to advertise the names of the affected retireees in the national dailies. Dauda Ahmed of Corporate Strategy Unit, PenCom, who make this known, said the PFAs have also been directed to visit the last place of employment or address of the retirees to obtain any available contact information or those of their next-of kin in an effort to trace them and ensure that outstanding benefits are processed for payment.

    He said: “In effect, we wish to confirm that there are no “unclaimed pensions” with PFAs in the real sense of it, but possible issues of temporary delay in processing the withdrawal of pensions/terminal benefits due mainly to loss of contact.

    “The balance in the Retirement Savings Account (RSA) of a retiree comprises the proceeds of his retirement bond, his contributions from July, 2004 to the month of retirement and the investment income. At the point of retirement, the retiree is expected to submit necessary documents to, and discuss with the PFA on his preferred mode of withdrawal of his pensions. The retiree has the option of either Programmed Withdrawal (PW) which provides pension over the expected lifespan through the PFA or purchase of annuity from an Insurance Company which ensures payment of pension for life.

    According to him, these payments can only be made after the Commission had granted approval of the agreement entered into by the retiree with his Pension Fund Administrator (PFA) regarding the mode of withdrawal of his benefit.

    “Nevertheless, there could be delays by retirees or next of kin in the case of death benefits in accessing retirement or terminal benefits, but not “unclaimed pensions,” he said, adding that such delays can be attributed mainly to the inability of the PFA to contact the retiree who may have retired to his village without leaving an active contact address with the PFA.

    He urged the public to always liaise with pension operators to sort out issues, adding that the new pension scheme is poised to provide comfortable life style for retirees.

    Meanwhile, operators in the pension industry have said they would leverage on the integration of businesses in the informal sector to increase the number of contributors from 5.2 million currently to about 20 million by 2017.

    Udeanu, who disclosed this at a media parley in Lagos, said several additional incentives are being proposed to make the pension scheme more beneficial to persons working in the informal sector, who accounts for over 60 per cent of the working population in the country.

    He noted that the PenCom has released an exposure draft of the framework for the participation of persons operating in the informal sector, stressing that the draft is currently being finalised.

    He said the framework once released would ensure the participation of persons working in the informal sector and effectively increase the coverage of the scheme.

    Udeanu said PenCom will also before the end of the first quarter of this year, incorporate a multi-fund structure for Retirement Saving Accounts (RSA) funds, into the amended investment guidelines.

    He said: “The decision to introduce the multi-fund structure in the first quarter 2013, is to allow enough time for public education and sensitisation by the commission and also allow operators enough time to be ready to implement the structure.

    “The multi-fund would be primarily differentiated by their overall exposure to variable income instruments and a contributor’s choice of funds may be limited based on the age of the contributor. Also the multi-fund structure would likely also allow for the introduction of a non – interest or ethical fund.”

    Managing Director ARM Pension Managers Limited, Sadiq Mohammed, on pension contributory recovery agents, said the agents have visited about 8,584 firms out of 15,760 identified as non-compliant by not remitting their workers’ contributory retirement funds to the appropriate quarters, adding that over N2.5 billion is expected to be recovered from the identified defaulters.

    He said demand notices and accounts details of pension custodians for remitting deducted pensions have been sent to the firms visited.

  • PenCom unveils guidelines for state pension bonds

    THE National Pension Commission (PenCom) has introduced new requirements for states wishing to access pension funds for investing in state bonds.

    According to the Commission, such a state must first enact a law to establish the Contributory Pension Scheme, which must give its contributions the same priority as salaries.

    The law should also address every inconsistency observed by the National Pension Commission in its review.

    In a circular signed by the General Manager, Public Sector Pensions, Mrs G. E. Usoro, it said such a state must establish a state pension board and a local government pension bureau to coordinate the implementation of the contributory pension scheme and other related matters in the state.

    Besides, the state should open retirement savings accounts with PFAs for employees that in the Pension Scheme in the state, and ”fully remit both employer and employee pension contributions into the employees’RSAs for a minimum of six consecutive months from the date of commencement of the scheme in the state’’.

    The Commission’s new position also indicated that such a state must “secure a group life insurance cover that guarantees a minimum of 300 per cent of the yearly total emolument of the employees covered by the Contributory Pension Scheme.”

    PENCOM’s requirement said the insurance companies engaged for this purpose must be eligible life insurance firms, licensed by the National Insurance Commission (NAICOM) and duly certified by the National Pension Commission as being compliant with the provisions of the Pension Reform Act 2004.

    Other requirements, according to the circular, are that states wishing to access the pension funds: “Must have consistently funded the Retirement Benefits Bond Redemption Fund Account, with the Central Bank of Nigeria, or any PFA from the date of commencement of remittance of pension contributions by the state.

    “Must execute an Irrevocable Standing Payment Order (ISPO), to mandate the Accountant-General of the Federation (AGF) to deduct at source and remit monthly pension contributions from the state’s share of the Federation Account Allocation to the state, in line with the guidelines of the Commission.”

  • Operators get new deadline on N1t target

    INSURANCE operators have up to 2017 to realise the N1 trillion target set for them, the Commissioner for Insurance, Fola Daniel, has said.

    He spoke at a briefing in Lagos.

    Daniel said: “Our people don’t trust insurance. We’ve done a considerable amount of housekeeping to make sure the companies respect the rules,” adding that the value of insurance contracts would rise from N300billion to about N1 trillion ($6.4 billion) in four years

    He said the industry would contribute about three per cent to the Gross Domestic Product (GDP), while insurance penetration would increase to 22.5 per cent from 10 per cent.

    He said compulsory motor-vehicle insurance, which makes up most contracts, would hit about 10 per cent by 2017; life insurance would constitute seven per cent, general business insurance, three per cent and petroleum companies’ insurance, 2.5 per cent.

    Daniel said oil and gas businesses would continue to contract international companies to insure their Nigerian operations as the capacity of local insurers is still limited.

    But Managing Director, Riskguard Africa Nigeria Limited Yemi Soladoye, said the industry failed to realise the target because of its inability to start the implementation of the Market Development and Restructuring Initiative (MDRI) in 2009, which was designed to prop up the projection.

    He told The Nation that the projection was part of the industry’s four-year strategic plan, adding that there was no way the target would have been achieved with the take-off of the implementation.

    On the expection from the insurance industry in the new financial year, the Riskguard chief said Nigerians need protection from insurers, adding that it is the duty of insurance companies.

    He said insurance companies are not living up to expectations as they have not been able to provide adequate protection to the public.

    He said: ”To me, it is a national duty that insurance companies should give us financial protection in this country, but that is lacking.”

    He said the industry has not been able to meet the needs of the public. He frowned at the performance of the industry, adding that what the industry records is minimal.

    He said: “We do not have what I would call real insurance companies in Nigeria. What we have are small firms. What the industry writes as annual premium income is not up to a premium that a branch or agency of a company writes in a normal insurance setting.

    ‘’For example, look out the results of Fortune 500, American Insurance Group (AIG) and more. These are companies that are generating about $250 billion premium each year. Convert that to naira, it is about N4 trillion.

    “Two years ago, an analysis was done on the 500 biggest companies in Africa; looking at the insurance companies on the report, there were 20, and none is from Nigeria. So, we are not there.

    ‘’A small country like Mauritius, with a population of 1.2 million generates 60 per cent of the premium income of Nigeria.”

    He said when the right things are done and operators have the vision to create a big customers service-oriented company, the industry would take its rightful place.

  • Insurers seek compliance certificate to enforce MDRI

    Stakeholders in the industry have called on the National Insurance Commission (NAICOM) to introduce compliance certificate in its review of the Market Development and Restructuring Initiative (MDRI) to ensure full enforcement of compulsory insurance.

    They said the introduction of the certificate would make the public bidding for government’s businesses comply with the law on compulsory insurance.

    President Chartered Insurance Institute of Nigeria (CIIN) Dr. Wole Adetimehin, said the MDRI needs law enforcement to thrive. He said the presentation of compliance certificates by individuals bidding for government’s businesses, have helped in adherence to group life policy of the Pension Reform Act 2004.

    He noted that for the public to comply with the compulsory insurance, NAICOM should ensure there is a law.

    President, Nigerian Council of Registered Insurance Brokers (NCRIB), Mrs Laide Osijo, called for collaboration with the government in the enforcement of the compulsory insurances in the MDRI.

    She noted that though NAICOM has helped make some insurance compulsory, effort should be intensified on the enforcement of the laws.

    She said: “I think the government has a lot to do. Some of the compulsory insurance are not enforced. NAICOM has tried in supporting the industry, by making some businesses to be compulsory under the MDRI. But the implementation and enforcement lie with the government at state and federal levels.”

    The Commissioner for Insurance, Fola Daniel, has said NAICOM will review the guidelines of the MDRI to align it, for better performance. He said the review is one of the commission’s programmes for the year

    He however declined to give the time table for the review and release of the guidelines.

     

  • Leadway Assurance man is Nigeria’s fourth actuary

    Leadway Assurance Plc has announced the elevation of Mr Kingsley Miller to the status of Fellow of the Society of Actuaries, United States.

    In a statement the company said Mr Miller, an Executive in its Actuarial Services Department, received the award in December last year. He was made an Associate the previous year.

    The company said Miller is the first Nigerian to qualify without leaving the country for studies abroad, despite the challenging environment.

    “There are just about six qualified actuaries practising in Nigeria; and of these, only four are Nigerians. This reiterates the need for more trained actuaries in the country as they are useful in complex investment structuring and insurance, making them integral to the development of any nation.”

    Managing Consultant, HR Nigeria Limited, Mr Rotimi Okpaise, also a Fellow, praised Mr Miller for the achievement, describing him as an indigeneous professional, who could stand on his own anywhere.

  • STI to acquire ICT facilities

    Sovereign Trust Insurance (STI) Plc is to employ modern technology to shore up its efficiency.

    Its Managing Director, Wale Onaolapo, said the new business model would latch on the benefits of modern technology to enhance the performance and the profitability of the organisation.

    In a statement,  its Head of Information Technology and Strategy Lekan Oguntunde, said: “Any forward-looking organisation must have real time, cutting-edge technology at the fulcrum of its business operations and that is what Sovereign Trust Insurance Plc has adopted in pushing the frontiers of its operations beyond the shores of the country.”

    He noted that the company has identified that 21st century technology is the hallmark and arrow-head of any successful business which was what informed the company’s adoption of specialised business application software in the insurance industry known as Eskadenia in 2009 with several upgrades over the years to ensure seamless world class service delivery to its teeming customers.

    Oguntunde noted that the Eskadenia Software was developed using an object-oriented programming language, which was designed to automate the general insurance policy life cycles of the company’s customers, reduce operational gridlock, enhance job quality, maintain up to-date historical data on all businesses generated while ensuring high level of customer confidentiality and security.