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Unearthing the Fraud Called HOS Group Life Insurance Scheme-House of Reps to the Rescue

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Between 10th and 14th February 2020, the House of Representative Committee on Insurance and Actuarial matters chaired by Hon. Darlington Nwokeocha grilled the heads of major insurance companies in Nigeria over the handling of the  Group Life Insurance scheme of the federal government.

By Friday 14th, it had become glaringly clear that the scheme which ordinarily should have been a source of joy for Nigerian public servants was one of the many good intentioned public policy programmes initiated by the government, but were unfortunately converted to a conduit pipe for frittering away public funds. The Head of Service (HOS) group life insurance scheme was proven at the committee to be ineffective, poorly executed and carried out at variance with the provisions of extant laws guiding life insurance policies.

 

Group life insurance

According to Wikipedia, Group Life insurance is an insurance policy “offered by an employer or large-scale entity (i.e. association or labor organization) to its workers or members. Group life insurance is typically offered as a piece of a larger employer or membership benefit package.”

The Head of the Service of the federation (HOS) is the office in charge of the federal government policy that sought to boost the confidence and work condition of the Nigerian civil servants.

The HOS group life insurance scheme which the insurance industry players described as the “biggest” of its kind in the Nigerian life insurance sub-sector cuts across several Ministries, Departments and Agencies (MDAs) of the federal government of Nigeria.

Some of the MDAs include the Nigeria National Petroleum Corporation (NNPC), Ministry of Defence (MOD) Office the Secretary to the Government of the Federation (SGF), Nigeria Electricity Regulatory Commission (NERC), Corporate Affairs Commission (CAC), Office of the National Security Adviser (NSA), Ministry of Works and Housing, Ministry of Power, Ministry of Police Affairs, Police Service Commission, the Independent National Electoral Commission (INEC).

Others include the Nigerian Military, Nigeria Police, Nigeria Customs Service (NCS), Nigeria Immigration Service (NIS), Nigeria Security and Civil Defence Corps (NSCDC), Central Bank of Nigeria (CBN), Ministry of Justice, Ministry of Trade and Investment amongst many others.

The fleece

At the inaugural sitting of the Committee, the Chairman, Hon. Nwokeocha expressed sadness that between 2014 and 2019, the federal government had committed a whopping N200 billion into the HOS group life insurance scheme with very little result to show for it.

Explaining the essence of the investigative hearing, the Chairman stated that the House of Representatives is in receipt of multiple “petitions from Nigerians complaining of infractions” on the operations of the HOS group life scheme.

He said that the House of Representatives based on the petitions and public outcry mandated the committee to look into the infractions.

He said:

“We have the mandate of the House of Representatives to look into some of the petitions that have been raised by so many Nigerians concerning some alleged malpractices in the insurance industry.

“One paramount thing for every Nigerian is to protect the interest of Nigerians in every position we find ourselves.

“The insurance committee resolved in line with its mandate that it has to look into these matters in the best interest of the Nigerian public.

“The group life insurance policy which is done to insure the lives of the personnel of our armed forces is very important, because it serves as motivation for them to do their duty and it must be guided jealously.

“Because of this we are here to ensure that we have the best practice {in the insurance industry} that will stand the test of time.

 

The HOS scheme

Major insurance companies in Nigeria including, WAPIC Life Insurance, Custodian Life Insurance, FBN Insurance, Lasaco Insurance limited, AXA Mansard Insurance, Metropolitan Insurance, Great Nigeria Insurance and many other major insurance companies are at the centre stage of what can be rightly described as one of the biggest public finance rip-off in Nigeria’s recent history.

 

What the law says about Life Insurance in Nigeria

The [Nigerian] Insurance Act 2003 as amended in section 57(1) provides thus:

“A policy of insurance shall not be made on the life of a person or other event without inserting in the policy the name of the person interested in it, or for those whose benefit or on whose account the policy is made.”

This express provision of the law that governs insurance business in Nigeria, the House Committee found out was the foundation for an ongoing fraud in the HOS group life scheme as all the insurance companies participating in the scheme have consistently observed that pivotal section of the insurance act in the breach, of course in collusion with top civil servants who head the various MDAs.

The noncompliance with the extant act, according to the insurance companies was occasioned by the refusal of the participating MDAs to readily supply relevant information containing the data of the prospective civil servants to be insured.

The committee was told that the MDAs were reluctant to avail the insurance companies with the required data.

Consequent upon the reluctance of the MDAs to supply the needed data of employees to be insured the Nigeria Insurance Committee, NAICOM, the umbrella body  insurers in Nigeria allegedly met and agreed on what they call “indicative data,” a situation where the MDAs supply an “estimated” data giving a rough calculation of the personnel in the individual ministry or agency upon which the underwriter of the group policy can rely on and provide cover for the prospective person to be insured.

According to the MD of Allianz Insurance, Olasunkanmi Adekeye, the insurance companies know for a fact that the data of the insured must be inserted before a life insurance policy can take off, they underwriters of the HOS group life scheme were confronted with the MDAs that were very reluctant to comply. According to him, the idea of “indicative data” came about because the insurance companies felt that if they insisted  on getting the data first, the civil servants were going to be the once at the receiving end. Consequently the underwriters decided to cover the personnel with a caveat that the data required ab initio must be provided at the point of claim.

“I am sufficiently aware that data is required to insert cover on these transactions. The decision we were faced with was, in the absence of adequate data should we decline cover such that in the event of loss the lives that are lost will not get any compensation on the grounds of inadequacy of the data. Or we provide data, but in the event of a claim, we insist that the condition precedent to us accepting liability will be based on the provision of the data.

“I could remember that that was one of the agenda that was placed before the CEOs of all the insurance companies at a meeting held with the umbrella body of insurance business in Nigeria, Nigeria Insurance Association.

“And so it was agreed that in the event of  a claim we should make it a provision that the data the data must be submitted as a precondition for the admission  of liability.

“We requested for data, but we understand the challenges that may be involved in sourcing for data even within the ministries.

Also, corroborating the above information, the MD of FBN Insurance limited, Valentine Ojuma told the committee that,  “The practice is to take the information as available in a  group form at inception and at the time of loss every detail is now provided.”

One after another, the Insurance executives gave different reasons for the jettisoning of the basic requirement of the insurance act in favour of an improvised practice which according to the chairman of the committee “allows the MDAs and the insurance companies the laxity to manipulate the payment of claim at any point in time.”

According to Nwokeocha, the danger and direct result of the noncompliance with section 57 (1) of the insurance act was that “the MDA can present “anyone” at any point in time for the purposes of claims without the insurance company knowing if such a person was actually the insured since there was no way of knowing the specific persons insured in the first place.

This practice according to Nwokeocha has led to the nonpayment of genuine beneficiaries despite the humongous billions of Naira the government had spent in the HOS group life scheme.

The figures

The HOS group life  scheme is a complicated and complex maze that looks simple on the surface, but when looked at deeply reveals a well planned scheme that promises a steady slush funds for both the MDAs and the underwriters.

For example, the Managing Director, WAPPIC Life Insurance Nigeria limited, Adewale Koko, told the committee that the HOS insured the personnel of four paramilitary organisations, namely the Nigeria Security and Civil Defence Corps (NSCDC), the Nigeria Correctional Service (NCS), Nigeria Immigration Service (NIS) and the Federal Fire Service (FFS) to the tune of N573.2million for the 2017/2018 insurance season with a consortium of Insurance companies led by WAPPIC as the lead underwriter.

However, WAPPIC as the lead underwriter within the same period, 2017/2018 paid N322 million in claims while another  N72 million claims was outstanding claims and that is for WAPPIC alone.

Answering questions on why it still had N72million claims pending, Mr. Koko went back to the unavailability of data of the insured.

Meanwhile, this same scenario runs across all the MDAs and the insurance companies. It became obvious that the MDAs may have deliberately allowed the loopholes in order to manipulate the figures and payment.

Briefing Journalists on the progress of the investigative hearing, Hon. Nwokeocha stated that the hearing was the first part of the investigations the committee was mandated to carry out. He said that  the committee after the collation of relevant data and evidences will embark of forensic audit of the HOS group life insurance transactions in order to save the Nigerian public servant from the trauma they currently undergo in the HOS scheme.

Committee

2020 Budget: FG has Released Funds for Implementation- Senate Appropriation Chairman-Jibrin Barau

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The Chairman of the Senate Committee on Appropriation, Senator Jibrin Barau (APC, Kano North) has revealed that the 2020 budget implementation was already on cause despite the effect of the coronavirus pandemic on the country and the global economy.

The lawmaker revealed that the Federal Ministry of Finance, Budget and National Planning had already commenced the release of funds for Ministries, Departments and Agencies (MDAs) of the federal government to enable them conclude the procurement processes in line with the provisions of relevant laws for the full implementation of the capital budget.

“The 2020 budget has just been signed few weeks ago and now, the next thing that comes up is that Ministries begins to actualize the provision of the budget.

“Where we are now is the Chief Executives of various Ministries are working round the clock to construct the procurement process.

“There is release of funds by the Federal Ministry of Finance so that the budget can easily be implemented.

“The Federal Ministry of Finance has just released funds to all Ministries across the board for implementation of budget and you know that President Muhammadu Buhari gave a matching order that 50% should be released on each item on the list so that budget can be funded.

“It’s when agencies of government get funds that they will switch into action to implement capital aspect of the budget; so this is the stage we are now,” the lawmaker told journalists in Abuja on Thursday evening.

Senator Jibrin however, stated that the impact of the Coronavirus pandemic would affect the full implementation of the budget, but he expressed hope that capital projects would be rolled over into the 2021 budget.

He said:

“If not because of COVID-19, the budget would have started running since February or March, 2020, unfortunately, it’s in the heat of the COVID-19 pandemic. The entire country was locked down and nothing was done particularly that revenue was not coming in.

“We cannot measure budget implementation until procurement processes are concluded and as it stands, it will take a while for us to see the extent of budget implementation.

“They may not be able to conclude the execution of budget this year, but what we will do in this circumstance is to roll over.

“If for instance a contract is awarded under capital project and because of time constraints 80% of it was not executed and the year ends, what should happen is to roll over the 80% to next year.

The President of the Senate had at plenary before the Senate adjourned for its annual recess requested President Muhammadu Buhari to ensure that the 2021 budge reached the National Assembly by September 2020 in order for the lawmakers to maintain the January to December budget cycle the 9th National Assembly had vowed to maintain.

 

 

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Reps Demand Reversal of Cancellation of 2020 WAEC, Urges MDAs to Collaborate on Examination

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The House of Representatives has called on the Federal Government to reverse its decision to cancel the WASSCE examination for Nigerian students in the 2020 examination year.

The position of the House was made known through its Committee on Basic Education and Services chaired by Hon. Julius Ihonvbere.

In a position statement issued and made available to journalists in Abuja on Friday, the Committee said it received with “amazement” the announcement of the Minister of Education, Malam Adamu Adamu indicating that Nigerian students will not be taking part in the regional examination in the year 2020.

“The House Committee on Basic Education and Services received with amazement the announcement by the Honourable Minister of Education that Nigerian students would not be participating in the forthcoming WASSCE examinations,” the statement read.

Going further, the Committee reminded the federal government that it was wrong to unilaterally take such a “policy reversal” without consultation with other critical stakeholders within the education sector. The Committee believed that the decision of the government would rather exacerbate the confusion in the education sector, including state governments and private school operators.

The House insisted that the federal government should reverse the decision and rather come up with more robust and practical strategies that will not jeopardize the future of the education sector as well of that of Nigerian students. The committee believes that if the government did not reverse its decision it would send wrong signals to the public and development partners as the cancelation will have fare reaching impact on the perception of the Nigerian education system.

The House, therefore called on the federal government to galvanize all its resources  and adopt a multi-sectoral approach to mitigate the effects of the coronavirus pandemic on the education sector and ensure that Nigerian students join their counterparts in the West African sub-region to take part in the examination.

“This sudden policy reversal is not good for the country. It is bound to create further confusion in the education sector,  create disappointment and suspicion among parents, frustrate the students, and show to our development partners and Nigerians that the distortions and disarticulations in the sector are only getting worse.

“The reversal also shows that our policy makers may just be adopting a laid-back approach to the need to confront the novel coronavirus rather than taking proactive and creative steps to manage and contain it.

The statement reads:

“The House Committee disagrees with the Honourable Minister and believes that a reconsideration is urgently needed to save our educational system on the following grounds:

“ Nigeria is not the only country expected to write the examination in the midst of Covid 19;

“Nigeria should insist that the examination be based exclusively on the already covered syllabus of schools,

“The Federal Ministry should not chicken out of its responsibilities but take charge, provide policy direction, engage the states and other  stakeholders;

“WAEC should quadruple its invigilators and use all classrooms and event centres to conduct the examination and comply with covid protocols;

“The ministry of Science and Technology as well as the Ministries of Environment and Health should immediately work out an agenda to fumigate all classrooms ,  provide handwashing buckets with soap and water, and facemasks to all students;

“ The original plan of opening hostels for boarding to facilitate so-called revision classes should be cancelled immediately and the students should come from home, write the paper and disperse immediately:

“ Mr. President should direct all his Ministers to return to their states, work with the Governors and ensure the smooth implementation of the policy and conduct of the examination.

“The House Committee appreciates the reservations of the Honourable Minister of Education. We are parents just like him. No Nigerian parent would want to delay, distort, even terminate the progress of their child.

“We are convinced that if our policy of no boarding house, re-conceptualising scope of exams, use of all classrooms and halls in the schools, quadrupling the number of invigilators,  provision of facemasks, sanitizers and hand washing facilities are followed, the WASSCE can be conducted with ease and with no repercussions.  Let us collectively save and advance our educational system and build a future we can be all proud of.

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Senate Set to Confirm Judges for FCT High Court, Buhari’s Nominees for CCB, INEC  others 

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The Senate on Tuesday received a formal request for the confirmation of 11 nominees as Judges of the Federal High Court of the Federal Capital Territory (FCT).

 

The request was contained in a letter read on the floor during plenary by the Senate President, Ahmad Lawan.

 

The letter reads: “In accordance to Section 256(2) of the 1999 Constitution of the Federal Republic of Nigeria as amended, I have the honour to forward for confirmation by the Senate, the under-listed names of eleven (11) nominees as Judges of the High Court of the FCT, Abuja.

 

The nominees are: Abubakar Husseini Musa (Adamawa State); Edward Okpe (Benue State); Babashani Abubakar (Borno State); Emuesiri Francis (Delta State); Jude Ogho (Delta State); Josephine Enobi (Edo State);  Christopher Opeyemi Oba (Ekiti State); Mohammed Idris (Kano State); Hassan Maryam Aliyu (Kebbi State); Fashola Akeem Adebowale (Lagos State); and Hamza Muazu (Niger State).

 

The Minority Whip, Senator Philip Aduda, while relying on Order 43 of the Senate Standing Rules objected to the absence of a nominee from the FCT.

 

Chairman of the Senate Committee on Judiciary, Human Rights and Legal Matters, Senator Opeyemi Bamidele (APC – Ekiti Central), while coming under the same point of order, explained to the contrary that the FCT already has Judges on the bench of the FCT High Court.

 

“What is being done by the National Judicial Council at the moment is to fill existing vacancies on the bench of the FCT Judiciary.

 

“What will become an issue is if you take list of the over 40 Judges of the FCT and any particular state is missing, that is when it becomes an issue.

 

“A major criterion is to ensure that states that do not have anybody on the bench are given priority. I just wanted to clarify that FCT has Judges on the bench of the FCT”, the lawmaker explained.

 

In a related development, the President also requested the upper chamber to confirm the appointment of three members of the Code of Conduct Bureau (CCB).

 

“In compliance with the provision of Section 154(1) of the 1999 Constitution of the Federal Republic of Nigeria (as amended), and pursuant to Section 1(2) and (3) of the Code of Conduct Bureau Act LFN 2004, I write to request for confirmation by the Senate, the following three nominees for appointment as members of the Code of Conduct Bureau. The curriculum vitae of the nominees are attached herewith.

 

They are: Barr. Ben Umeano (Anambra State – South East); Hon. Johnson Abonaema (Edo State – South South); Olayinka Babatunde Balogun (Ogun State – South West).

 

Also to be confirmed is the appointment of Umar Garba Danbatta, as Executive Vice Chairman of the Governing Board of the Nigerian Communications Commission (NCC) for a second term of five (5) years.

 

According to President Buhari, the nominee’s appointment is In accordance with the provision of Section 8(1) of the Nigerian Communications Act 2003.

 

Meanwhile, the confirmation of the nomination of Idahagbon Williams Omoregie for appointment as Commissioner of the Federal Civil Service Commission was referred by the Senate President, Ahmad Lawan, to the Committee on Establishment and Public Service.

 

The Senate President also referred the nominations of Usman Mahmud Hassan as Commissioner of the Revenue Mobilization Allocation and Fiscal Commission to the Committee on National Planning and Economic matters; Tella Adeniran Rahmon as Resident Electoral Commissioner of the Independent National Electoral Commission to the Committee on INEC; Suleiman Sani as Career Ambassador; and the appointment of 41 Non-Career Ambassadors to the Committee on Foreign Affairs. The  Committees are expected to submit their reports to the Senate in two weeks.

 

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