THE NATION MONDAY, JANUARY 14, 2013
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INSURANCE
Dana Air crash: Lawyers accuse Prestige, others of laxity
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FIRM of solicitors and legal consultants, M.O. Awoyemi & Co , has accused Prestige Assurance PLC of neglecting the family members of those who died in the Dana Air crash in June, last year. The firm, which represents 40 families, who died in the crash, said the insurance firm refused to pay its clients the mandatory $30,000 claims as stipulated by international law, seven months after the crash. In a statement made available to The Nation and signed by its Managing Partner, Dr Bunmi Awoyemi, the law firm accused Prestige Assurance and its reinsurers, Pritchard Insurance Limited/Lloyd’s of London, of not caring for the family members of the crash victims. He said of the 40 families, only 13 have been paid the $30,000 each. He said out of the over 150 victims involved in the crash, only 80 of their family members have been compensated, adding that many of them include families, who lost
Stories by Uyoatta Eshiet
more than one member. For such families, most of them were paid $30,000 per family, instead of the mandatory $30,000 per victim. He said the insurer and re-insurers deliberately want to postpone the amount to be included with the balance of $70,000 they are offering to make victims family members sign-off their rights to a law suit. He said: “They are doing this despite the fact that the Civil Aviation Act makes the payment of $30,000 per victim mandatory and payable within 30 days of any air crash. ”This wicked and callous action is being perpetrated by Prestige Assurance PLC and its re-insurer of 70 percent of the risk, Pritchard Insurance Limited/Lloyd’s of London, who have instructed their solicitors to pay only $30,000 per family, which explains why the Oyosoro’s and Ibe’s were each paid $30,000 instead of $60,000 despite the fact that they each lost two family members each. As of today,
only one more of our remaining clients has been paid.” Awoyemi condemned the Aviation Minister and the Nigeria Civil Aviation Authority (NCAA) for allowing Dana Air to resume operationswhen it has not paid compensation. He said: ”One hundred and sixty lives were lost; many of the relatives of the dead are still dealing with the issues arising from the death of their family members. In fact, some are yet to pick up the bodies of their dead relatives; while some family members only got body parts, others are yet to find the bodies of their relatives because their bodies were incinerated. He said based on his earlier petition to the Aviation Committees of the Senate and the House of Representatives, a report recommending the withdrawal of Dana Airlines operating licence for a number of reasons, including the fact that they were yet to pay proper compensation to the victims of the crash was issued.
Furthermore, the House of Representatives passed a resolution adopting the recommendations of these Committees and called on the Minister of Aviation to implement the recommendations. “I am shocked that the Minister of Aviation still went ahead to write Dana Airlines authorising their resumption of flight in defiance of the recommendations of the report of the Joint Aviation Committees of both the Senate and House of Representatives and in defiance of the resolutions of the House of Representatives.” Awoyemi said what Dana and Prestige Assurance are doing in Nigeria cannot be tolerated in any other country. He called on the Federal Government and well-
meaning Nigerians to warnDana and Prestige Assurance to respect Nigerians. However, the Managing Director of Prestige Assurance Plc, Annand Mittal, denied the allegation. He said as soon as they receive the advice to pay, they would pay others. He said the decision to pay comes from Dana Air management through their lawyers. Mittal said, to date, they have paid 80 victims the mandatory 30 per cent, adding that the balance would be paid by Re-insurers, Pritchard Insurance limited and Lloyds of London. He added that it is not their responsibility to determine who to pay, but that of Dana Management.
40 broking firms, others get PenCom certificates
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IX insurance companies and 40 broking firms were among the 74 companies that received the National Pension Commission (PenCom) compliance certificates last year. In a statement, the commission said only 74 companies, which include, Creed Insurance Brokers Limited, Leadway Assurance Plc, and Lasaco Life Company met the requirement for the certificates by January 4, this year. The Pension Reform Act (PRA) 2004, made it compulsory for companies seeking government business to present certificates of compliance, which indicate that they are meeting the regulation on staff pension contributions. The PRA 2004 also mandates employers with minimum of five staff to subscribe to the new pension scheme. To ensure enforcement of the law, the commission said employers who fail to remit their pension contributions would pay two per cent surcharge, two weeks after deductions have been made by them. PenCom noted that employers are to remit employees contributions
not later than seven working days from the day salary is paid, adding that if the default persists after three months, one per cent of the outstanding would be paid to the commission. The commission said it would sue defaulters if violation persists, adding that employers who refused to give access to information about their staff would pay a fine not more that N200,000 and that every false or misleading information would attract N100,000 fine daily for the duration of the the offence. It said any employer, who coerces employees to open RSA with Pension Fund Administrator (PFA) that is not their choice, would pay N1,000 after three months per employee for every month of violation. The commission is seeking leave of the attorney-general of the Federation to institute criminal proceedings against employers who refused to remit pension contributions PenCom called for the amendment of Section 11(7) of the PRA 2004, stressing that the provision ihas some limitations.
CIIN advises firms on staff training • From left: Chief Financial Officer Siemens Limited Nigeria Funmi Akande; MD /CEO Michael Lacota and Head Corporate Communication Josephine Otigba during the introduction of Lacota to reporters as new MD in Lagos. PHOTO: SOLOMON ADEOLA
NCRIB to check fake operators
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HE Nigerian Council of Registered Insurance Brokers (NCRIB) is taking steps to sanitise the sector, The Nation has learnt. Its National President, Mrs Laide Osijo, said the Council would send the list of genuine brokerage firms to clients to check fake operators. She said the council would also close registration for members on March 31, adding that by the first week of April, the list of members would be published. She said: “Our rule states that we should publish the list of members every year. I must not forget to commend the effort of the Commissioner for Insurance for his efforts in promoting the affairs of the council. “Our law says that registration with NCRIB is a requirement for licensing by NAICOM. Before this year, so many brokers have been going to NAICOM for registration, but since the beginning of this year, NAICOM has refused to give anybody licence if they did not have the NCRIB registration certificate. The Commissioner and his team have been doing a good job to ensure people comply with the rules.” The Council chief also said: “If a
firm has a new chief executive, the person has to come to the council for us to check if he is fit to run the organisation. This is because the new executive would be held liable for anything that happened in the firm. “If an organisation changes its executive, it has to write to us and we would give it six months to present the executive for examination. If an operator failed to meet up with his financial obligations, his membership will lapse, that is also what NAICOM is doing.” She said members have been told to renew their membership before March 31, to avoid being sanctioned. On the proliferation of brokerage firms, the president said some of them were established to secure a particular business.. She said the council has observed that some people just register a brokerage firm because they wanted to secure a business through their relatives, who can assist them. She noted that these individuals abandon the firms once they get the business. She added that some of the brokerage firms were also established because people wanted to be known as managing direc-
tor. She said: “Instead of 10 people joining hands to form a strong firm, they want to be managing directors. We have always encouraged mergers and acquisition. If you have a formidable team, it is better than being alone.” She noted that the council is collaborating with the National Insurance Commission (NAICOM) to ensure that only genuine operators and professionals operate in the sector, adding that at the monent the council has to give approval before a firm is licensed by NAICOM. “The NCRIB law says that registration with NCRIB is requirement for licensing by NAICOM. Prior to last year, so many brokers do go to NAICOM, for registration but from last year, NAICOM has refused to give anybody licence if they did not have the NCRIB registration certificate. The Commissioner and his team have been doing a good job to ensure people comply with the rules,” she said. Stakeholders said any step taken by the council to sanitise the sector is welcome, adding that it would help curb unethical practices and enhance the industry’s performance.
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NSURANCE firms have been advised to raise their training budgets to prepare their staff for increased productivity and the challenges ahead. The President, Chartered Insurance Institute of Nigeria (CIIN), Dr. Wole Adetimehin, said underwriters and brokers have assured of improved budget on staff training, adding that they have realised that the best assets is their human capital. He noted that the CIIN management had engaged the operators on the need to see the institute as theirs, adding that the body has continued to find ways of enhancing the human capital of the industry.
Adetimehin said over the years, most companies reduced their budgets for training. He said: “I suspect that the budget for training has been falling. I do not have the figures, but I suspect that there have been some scaling down of budget for training over the years. This is a major challenge. He said members of the industry were getting the best on training from the institute, stressing that operators are encouraged to seek knowledge from every reputable sources to develop and re-develop themselves. He said for the industry operators to remain relevant, they must seek and get adequate training.
Aetna fined $1m for insurance violations
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CONNECTICUT insurance company has been fined $1 million by Washington State Insurance Commissioner Mike Kreidler for multiple violations over several years. Aetna Life Insurance Company has agreed to pay the fine. The violations include issuing unapproved insurance policies, failing to file legally-required documents with the state and charging unapproved rates. “All insurers must comply with state law, and most of them do,” said Kreidler. “I hope that this fine and compliance plan resolves these problems with Aetna.” Starting in 2005, Aetna issued health, disability or life insurance policies to more than 4,400 people that did not comply with state law. Among the violations: The policies had not been filed for approval with Washington state.
Also starting in 2005, the company issued health policies that did not include all Washington state health care mandates. Nor did they describe Washington’s appeals and grievance process, as required by law. For more than three years, Aetna continued to sell a health policy that had been disapproved. Starting in 2009, Aetna issued other health, disability and life policies that had not been filed with the state. Some of those health policies that did not include Washington state mandates. Nor did the company have an approved appeals and grievance process for those plans. In 2010 and 2011, Aetna issued medical and dental plans for more than 100 Nordstrom retirees that had not been approved by Kreidler’s office, as required by law.