Henceforth, the government and private sector employers will pay increased premium for the compulsory Group Life Insurance Policy of their workers, investigation has revealed.
Our correspondent gathered that in a recent circular on rates for compulsory insurance that was recently released by the National Insurance Commission, the new premium rates were raised by between 200 per cent and 300 per cent more than what the insurance companies were charging the employers previously.
It was also discovered that many employers who were asked to pay the new statutory rates had been complaining.
The President, Nigerian Council of Registered Insurance Brokers, Mr. Shola Tinubu, said many employers were complaining about the new rates they had to pay for the GLIP.
“This year, NAICOM came out with the guideline effectively increasing the rates for statutory insurance, one of which is the GLIP, and that has caused a bit of a problem because premium figures had been built into the budget and sent to the National Assembly, and some other institutions have sent theirs to the boards for approval,” he explained.
According to him, the figures that the government and other employers sent to the National Assembly and the respective firms’ boards were much lower than those approved by NAICOM.
Tinubu observed that many institutions were stuck because the government and some private firms could not afford to spend more on insurance than the funds approved for that purpose.
“The figures have increased in some instances by about 200 per cent, while in some by 300 per cent,” he said.
He, however, stated that the Nigerian Insurers Association and the NCRIB were engaging NAICOM on the issue.
Tinubu also stated that premium paid on the GLIP of government workers was sometimes delayed.
He suggested that the renewal period of the policy for government workers should be shifted to the middle of the year, when the budget would likely have been passed and money would be readily available to pay the premium.
“If you know you cannot spend money from the budget unless you have approval, move your renewal date to a date further off, maybe June, and know that your GLIP renewal will be due for renewal every June because by then, you would have given the government time to go to the National Assembly for budget approval and premiums would be ready for payment,” he said.
After the circular on rating was released, the Deputy Commissioner, Technical, NAICOM, Mr. Sunday Thomas, stated that the commission would monitor the issue of competition among operators in the insurance sector.
“We have released the ratings to guide the market and I believe this is going to control the issue of competition within the market; we are going to watch as events unfold. This is the starting point for managing competition in the sector,” he said.
Thomas added that the penalties for violation of the ratings had been enshrined in the applicable insurance laws.
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