The Presidency, ministries of Foreign Affairs, Education and Departments and Agencies of the federal government, are to spend the sum of N22.4billion on insurance premium this year, according to a breakdown of 2017 Budget.
An analysis of the fiscal document, submitted by President Muhammadu Buhari, to the National Assembly in December, showed that federal government group life insurance premium has a provision in the budget of N15billion.
A breakdown of this amount showed that while about N22.4bn would be spent on insurance premium, Ministry of Agriculture and its parastatals have also provided for the sum of N1.9bn; federal government subsidy to farmers through the Nigerian Agricultural Insurance Corporation (NAIC) has a provision of N917.7m; National Lottery Trust Fund N881.4m; Federal Ministry of Foreign Affairs and its Missions was allocated N801m; Institute of NigComSat IR & Upgrade, N5979m; Police Formations & Commands, N304.6m; Nigeria Security and Civil Defence Corps (NSCDC) insurance premium was NN120.3m and Health, N44.4m.
Similarly, the budget details also indicated that the Presidency, and parastatals under it, has insurance premium provision of N83.8m, Office of the Secretary to the Government of the Federation and its parastatals is to spend N31.2m on insurance premiums.
The Ministry of Finance had a budget of N38m for insurance premium while the Debt Management Office was allocated N1.5m for the same purpose.
Others are Investment & Security Tribunal, N6.7m; Budget Office of the Federation, N1.07m and Federal Ministry of Labour & Employment, N36.4m.
Also the Office of the Accountant-General of the Federation had a provision of N15.3m while the Pension Transitional Arrangement Department had N30.5m budgeted for the same purpose.
Others are: Defence N371.5m, Nigeria Airforce, N15.3m; Defence Space Agency, N5.7m; Nigerian Navy, N6m and the Nigerian Defence College, N9.3m.
The Commissioner of Insurance, Alhaji Mohammed Kari insisted that the new policy applied to all insurance holders, be they public or private sector individuals and organizations.
According to him, “Under the implementation of the provisions of Section 50 (1) of the Insurance Act 2003, “the receipt of insurance premium shall be a condition precedent to a valid contract of insurance and there shall be no cover in respect of an insurance risk unless the premium is paid in advance”.
“The policy applies to all. Those who default in payment of premium cannot enjoy claims. It does not work like that. In the past there were issues of people making claims even when they were not up-to-date in their payment of premiums.
The strict application of the provisions of that section started three years ago which Kari added became necessary to know the true financial position of each insurance company, as according to him, there were situations, in past, where it was difficult to know the true positions of some companies owing to unpaid premiums by policy holders.
Director-General Nigeria Insurance association, Mr. Sunday Thomas said the federal government had promised to follow through with the No Premium, No Cover policy of the industry.
According to Thomas, “Underwriters had a meeting with Federal Government during which the government promised prompt compliance to the No Premium No Cover (NPNC) provision”.
Government, he said, vowed to pay all outstanding premiums, stating that insurance industry has come out of the era of premium defaults.
