The Presidency, ministries of Foreign Affairs, Education and the other Ministries, Departments and Agencies, MDAs, are to spend N22.4 billion on insurance premium this year, according to the 2017 budget. An analysis of the fiscal document, submitted by President Muhammadu Buhari, to the National Assembly in December, showed that the Federal Government’s life insurance has a provision for N15bn, the highest figure for insurance premium.
A breakdown of this amount showed that, while about N22.4bn would be spent on insurance premium, Ministry of Agriculture and its parastatals have earmarked N1.9bn; Federal Government subsidy for farmers through the Nigerian Agricultural Insurance Corporation, NAIC, is N917.7m; National Lottery Trust Fund is N881.4m; Federal Ministry of Foreign Affairs and its missions was allocated N801m; Institute of NigComSat IR and Upgrade got N5979m; Police Formations and Commands, had N304.6m; Nigeria Security and Civil Defence Corps, NSCDC, insurance premium is NN120.3m and Health, N44.4m.
Similarly, the budget details also indicated that under insurance premium, while the Presidency and parastatals under it have N83.8m; Office of the Secretary of the Government of the Federation, SGF, and its parastatals are to spend N31.2m. The Ministry of Finance had a budget of N38m for insurance premium while the Debt Management Office, DMO, was allocated N1.5m for the same purpose.
Others are Investment and Security Tribunal, N6.7m; Budget Office of the Federation, N1.07m and Federal Ministry of Labour and Employment, N36.4m. Also, the Office of the Accountant-General of the Federation has a provision of N15.3m, while the Pension Transitional Arrangement Department has N30.5m budgeted for the same purpose.
Others include: Defence Missions, N371.5m; Nigeria Airforce, N15.3m; Defence Space Agency, N5.7m; Nigerian Navy, N6m and the Nigerian Defence College, N9.3m. However, the insurance companies in the country will need more than N22.4bn annual insurance premium from government to attain their rightful place in the economic system but structural reforms, re-jigging of their business model, jettisoning their over-dependency on public sector premium could put them in the path of meaningful growth.
The Commissioner of Insurance, Alhaji Mohammed Kari, has insisted that the new policy applies to all insurance holders, be they public or private sector, individuals and organisations. 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,” he added. On efforts of the Nigerian Insurers Association, NIA, the Director-General of the association, Mr. Sunday Thomas, said that 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, and provision.”