Akinlabi Emmanuel
The House of Representatives on Wednesday, directed its Committee on Insurance and Actuarial Matters to carry out a forensic investigation into over N30 billion in unresolved insurance claims linked to the Nigeria Police Force, the Head of Service, and the Ministry of Defence. The unresolved claims stem from failures in actuarial valuation, gap analysis, and non-compliance with key provisions in the Insurance Act of 2023 and the Pension Reform Act of 2014.
The House’s decision followed the adoption of a motion titled “Breaches and Other Infractions of Some Federal Government Institutions on Insurance and Actuarial Matters using Forensic Auditors”, sponsored by Sulaiman Gumi, the member representing Gummi/Bukkuyum Federal Constituency of Zamfara State.
Gumi highlighted several challenges plaguing the insurance industry, including outdated insurance laws, a shortage of professional loss adjusters, irregular payment of loss adjusters’ fees, non-remittance of premiums (especially to reinsurers), lack of innovation, and inconsistent government policies. He also pointed out the industry’s failure to collaborate effectively with the Central Bank of Nigeria (CBN) and the Assets Management Company of Nigeria (AMCON), undermining financial stability. Furthermore, he emphasized the cumbersome processes for failure resolution and the reimbursement of depositors as critical concerns facing the industry.
He said, “The House is concerned that non-transparency and lack of accountability in insurance practice in Nigeria today have resulted in over N30bn unsettled claims in the group life insurances of the Nigeria Police Force, Head of Service (for Federal Civil Servants), and Ministry of Defence (for the Nigerian Armed Forces) because of no actuarial valuation, no gap analysis, and non-compliance with Section 57 of the Insurance Act, 2023, and Section 4, Subsection 5 of the Pension Reform Act, 2014, among other factors.
“We are aware that over $1bn that should have been retained in Nigeria if all insurance practitioners are given the option of the right of first refusal (insurance being more about risk bearing and sharing) is being taken abroad, which affects the nation’s economy, thereby always weakening our insurance sector and depleting our foreign reserve.
“These breaches and infractions have given rise to excessive cession and retrocession of businesses in breach of the Local Content Act to the extent that 90 per cent of the risks of some Federal Government organisations are placed outside the country.”
He added the effect of this development “has led millions of families of the deceased Federal Government’s personnel that are the beneficiaries suffering because they were not paid the entitlement of their breadwinners.”
He stated, “When paid, in some cases, unallowed deductions are made, thereby shortchanging them.”
“The House is worried that the Committee on Insurance and Actuarial Matters letters to the Ministries, Department and Agencies like the Nigerian Ports Authority, the Nigerian National Petroleum Company Limited, National Emergency Management for either document to enable them oversight or appear before the Committee to address these issues are being treated with ignominy.”
The Zamfara lawmaker further claimed that there are huge unsettled life claims in Nigeria “because the premiums meant for payment were suspected to have been squandered by some insurance companies and a few individuals, and it is only a forensic auditor that will unravel this.”
The motion was unanimously supported by lawmakers presented at Wednesday’s plenary and was thereafter referred to the Committee on Insurance and Actuarial Matters to report back to the House within four weeks for further legislative action.
