Assessing group life viability in NNPC, MDAs amidst pandemic

The House of Representatives is currently investigating the insurances of the Nigerian National Petroleum Corporation (NNPC), and a few Ministries, Departments and Agencies (MDAs), to evaluate the insurance portfolios of NNPC to know the viability of the allegation levelled against it.

The lawmakers, a month ago, said it will carry out an investigation into $179 million premium allegedly paid by NNPC and Joint Ventures (JVs) for non-existing assets overseas as well as the implementation of insurance policies of other MDAs.

Other issues the lawmakers said it will look into include ineffective regulation of foreign placement of insurance, alleged breaches on insurance business by industry practitioners, low retention capacity of dollar-denominated insurance business, underutilization of capacity of Nigeria insurance policy, among others.

The Chairman, House Committee on Insurance and Actuarial Matters, Darlington Nwokocha, said the investigation was necessitated by alleged breaches by industry practitioners; low retention capacity of dollar-denominated insurance business, and the effect on economy; and underutilisation of the capacity of Nigeria insurance policy.

After the pre-forensic meeting, he said, his Committee would deploy forensic auditors to NNPC and all the MDAs as well as insurance companies and brokers handling the portfolios.

Although all the allegations and issues raised are industry-related and within the purview of the regulatory authority, yet, the lawmakers pointed accusing fingers on majorly the NNPC.

However, investigation showed that since 2013 to the current insurance year (2020/2021), the premiums paid by the Corporation has been reducing consistently, notwithstanding that the assets value have been increasing through acquisition of new assets and new investments.

From a premium of $79.8 million and asset value of $50.3 billion in 2014/2015 insurance year, the premiums have been on a downward trend to $39.6 million with an increased asset value of $68.9 million for 2020/2021 insurance year.

The Corporation insists that as a corporate entity it values all extant laws in its operations, including those regulating insurance of assets and liabilities.

The contracting process and strategy of the Corporation insurance placement in compliance with the provisions of the Public Procurement Act (PPA) 2007, Bureau of Public Procurement Guidelines, the Insurance Act, and NNPC Policy and Procedures Guidelines.

Based on the credibility of the contracting process, findings showed that NNPC has had no cause to resort to litigation in claims recoveries in the last 10 years. It has also never received any query from any regulatory agency on compliance to process and procedure. Rather, they have always obtained approvals where necessary, and received recommendations from regulatory agencies.

Market observers applauded NNPC insurance procurement process as robust, open, transparent and competitive in full compliance with the provisions of the PPA 2007, and the Corporation’s Supply Chain Guidelines.