Exclusive… Revealed! The report that got AGF into trouble

In from Ali Smart….

Fresh fact has emerged as to what led to the sack of the embattled Accountant-General of the Federation, Jonah Otunla.

Ripples can authoritatively report that there were damning revelations by family members of Department of State Security (DSS) officials that lost their lives while fighting insurgencies across the country in 2013 up to date.

The families, who have been ruled out of compensation as the federal government has withheld death benefits due to them, may have caused Otunla his job.

Investigations by Ripples revealed that the compensation may have been withheld due to the non-payment annual premium due to the insurance companies handling the group life assurance scheme for civil and public servants.

Under the scheme which kicked off in 2008, the federal government is expected to pay the premium annually to the insurance companies who will then pay death benefits to the families of the policyholders that die within a particular year.

The 2013 budget allocation to compensate families of those that died that same year had been approved for payment since June last year, but it is still being withheld at the office of the Accountant-General of the Federation (OAGF) till today.

Other paramilitary bodies that are also affected include the Nigerian Custom Services, Nigerian Immigration Services, Nigeria Prison Services, Fire Services, and the Nigeria Drug Law Enforcement Agency (NDLEA). The Ministries of Power and Works are also affected.

A source in the office of the National Security Adviser (NSA) confided in Ripples that the insurance companies handling the police and the military had to allegedly offer between N10 and N30 million to the officials in the OAGF before payments were made to them last December and March this year.

He observed that members of the intelligence community are not being encouraged to put in their best under such circumstances.

“It is not worth dying for the country if the families left behind by the officials of the agencies are not being cared for” he said.

Findings at the Budget Office showed the OAGF is still acting in defiance of the Authority to Incur Expenditure (AIE) issued by the then Finance Minister, Dr. Ngozi Okonjo-Iweala since June 2013 to pay the insurance premium for the group life assurance cover procured by the federal government for workers in these agencies.

Barely a month ago, some SSS officials were killed in Abuja while trying to prevent a jailbreak by incarcerated members of the dreaded Boko Haram sect.

The implication of the non-payment of the insurance premium for these staff is that, their families and those of other civil and public servants killed in 2013 will not be able to collect their death benefits.

The Federal government in 2008, started group life assurance scheme under which it procures life assurance cover for its workers. Office of the Head of Civil Service of the Federation which is to coordinate the scheme, ensures that premium for the workers’ life assurance cover is included in the annual budgets.

Further checks by Ripples revealed that the insurance premium for the workers that were insured for the 2013 policy was approved for payment in June but was paid by the AGF in December after several pleas.

The insurance companies are handling the police and some ministries got payment in December while the Insurers of the members of the intelligence community, paramilitary agencies, and workers in ministries of power and Works could not be paid due to errors in their bank’s account details.

The money, it was gathered, reverted to the federal government accounts in the Central Bank of Nigeria (CBN).

One of the insurance companies affected told Ripples that all efforts to retrieve the money from the AGF since December had been in vain.

“We have intimated the Budget Office about the development and had since submitted the correct account details,” a manager in one of the insurance companies said.

He stated that the AGF on January 23, wrote to the Budget Office for the new account details of the affected insurance companies which the budget office sent via a letter on January 27.

“We thought things would be sorted out with the correspondences between the two offices but it was not to be as the money is still with the AGF till today.”

The insurers and the families of the dead workers, according to him, are worried because the AGF had in one of their several discussions disclosed that the money would not be paid after March 31, 2014.

Federal government had drawn the curtain on award of contracts under the 2013 budget in September while all the unspent allocation of the 2013 budget would have reverted to the treasury by April 1.

This development pressured one of the insurers, Arm Life Plc that handles ministries of works and power to which N65.7million insurance premium is due, to write the office of the Head of the Civil Service of the Federation, seeking the intervention of E.O Oyemomi, the permanent secretary, CMO in the issue.

The letter dated January 24, 2014 and titled ‘Non-Payment of Premium on the Group Life Assurance Scheme of Federal ministry of Works and Ministry of Power (HOS)’, drew the attention of the permanent secretary to the refusal of the AGF to pay the premium for the 2013/2014 assurance scheme.

“We write to remind you that we are yet to receive the group life premium for the year 2013/2014 renewal on the above two schemes that we are leading on.”

“However, it is pertinent to let you know that a month has gone by when the disbursements of premium were made to other lead underwriters on other Head of Service accounts.”

“In this wise, we implore you to please use your good office to facilitate the payment of the premium to us as we do not want to flout the position of the guideline of our supervisory body (NAICOM) of “No Premium No Cover.”

Ripples investigation revealed that Arm Life Plc sent a similar letter signed by Bowale Olanrewaju, head, public sector unit and Julius Araga, Head, compliance unit, to the regulator, NAICOM titled: ‘Unremitted Renewal premium on Federal ministry of Power and Federal ministry of Works.’

In the letter, the parties stated as follows: “We wish to seek your intervention on the above named ministries under the Head of Service (HOS) unified scheme that we are leading on, and for which we are yet to receive their premiums despite the fact that all other underwriters have received theirs on 24th December, 2013.”

“We were made to understand at the office of the Head of service that there were errors in the account details and name supplied from the office of the accountant general of the federation (federal ministry of finance) when our premium was to be paid to us. We had since then been making concerted efforts on getting the premium paid but to no avail as at date.”

“In view of the above, our major concern now is how the continuous delay of the payment would not distort the effective date of December 24, 2013 as agreed by the underwriters on the unified scheme under the Head of Service. We therefore seek your advice on how this delay can be handled without flouting the “No Premium No Cover” guideline.

Following up on the Arm Life Plc complaints, NAICOM wrote the AGF seeking the payment of the premium to the company and the Industrial and General Insurance Company, who is the insurer of SSS and paramilitary agencies. Payments to the two companies total several billions of naira.

In the letter referenced NAICOM/AGOF/CFI/HOSGLA/037 and signed by its deputy insurance commissioner, George Onekhena, the commission noted that the Budget office of the Federation informed it that funds allocated for premiums under the 2013 budget was duly released and had not been withdrawn.

In the letter titled “Unremitted Premium In Respect of the Group Life Assurance Cover for Employees of the Federal Government”, the NAICOM stated that “whilst other companies were paid on the 24th of December, 2013, as part of public service-wide scheme, the payments due to the companies-IGI and Arm Life Plc were not successful due to errors in the account numbers presented to your office. We are aware that these companies promptly amended the details and advised your office accordingly.”

NAICOM noted further that “if the premium remains unpaid, employees in these agencies will be uninsured, thus death benefits will not be paid by insurers.”

The regulatory body drew the AGF’s attention to a similar scenario that occurred in 2013 and how it had resulted in a huge un-budgeted liability for the government, and which has not been addressed yet.

On the implication of the continued withholding of the premium, NAICOM noted, “The armed forces and the intelligence community are affected and the national security implications in view of the effect on the morale of personnel in these agencies cannot be over-emphasised.”

Below are copies of the letters that were sent….

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