Employers are reluctant in complying with the group life insurance policy and the provisions of the guidelines jointly issued by NAICOM and PenCom. In order to enforce compliance, the policy and the provisions of the guidelines and bring it to the attention of employees, PenCom issued a notice to all employers and employees on the subject matter entitled: “Re: compliance with PRA 2014 on Group Life Insurance Policy for employees and display of insurance certificate for 2021”. The notice advised employers who have not displayed a copy of the group life insurance policy certificate within their premises to do so on or before 31st July, 2021. It went further to remind them that failure to comply is a violation of section 4(5) of PRA 2014.
SOCIAL security is the protection, which society provides for its members, through a series of public measures, against the economic and social distress that otherwise would be caused by stoppage or substantial reduction of earnings, resulting from sickness, maternity, employment injury, unemployment, invalidity, old age and death.
The International Labour Organisation (ILO), since its inception, has continued to adopt resolutions, recommendations and conventions on various aspect of social security. In 1952, a more comprehensive Convention (No. 102) concerning Minimum Standards of Social Security was adopted, in which provisions were made for medical care, sickness benefit, unemployment benefit, old age benefit, invalidity benefit, employment injury benefit, family benefit, maternity benefit, and survivors benefit. The Convention, which established minimum standards for all nine branches of social security, is the flagship of all ILO social security conventions.
The Social Security (Minimum Standards) Convention, 1952 (No. 102), makes it clear that overall responsibility for the proper administration of the scheme and its institutions, lies with the state.
According to the ILO in its Income Security Recommendation 1944 (No. 67), income security should relieve want and prevent destitution by restoring, up to a reasonable level, incomes which are lost due to inability to work (including old age) or to obtain remunerative work, or by reason of death of a breadwinner. ILO avers that income security should be organised as far as possible on the basis of compulsory social insurance.
Nigeria, as a member state of the ILO, has domesticated the various benefits of Convention (No. 102) of 1952, in various segmented legislations. With regards to survivors benefit, prior to the enactment of the PRA 2004, the precursor of the PRA 2014, when a worker dies as a result of employment injury or in the course of employment, pensions may be paid to survivors as defined in legislation for an employee of the public service or collective agreement for employee of the private sector. A funeral benefit may also be payable. This provision was adequately covered in the repealed Pension Acts’ No. 102 and No. 103 of 1979 for civil service and the military respectively and the NSITF Act.
Employees and their unions, have a duty to also enforce employers compliance with the provisions of section 4(5) (6) and (7) of PRA 2014 and section 5.5 of the Revised Guidelines on Group Life Insurance Policy for employees. The policy is taken in favour of the employees; therefore, they should be interested in their employer’s compliance. An employee can anonymously give information of non-compliance to PenCom and PenCom will act on such information without asking for the identity of the employee, in order to protect the employee from victimisation by the employer.
The PRA 2014, section 4(5)(6) and (7) make it mandatory for employers to maintain a group life insurance policy for employees covered by the PRA 2014. The section provides that every employer shall maintain a group life insurance policy in favour of each employee for a minimum of three times the annual total emolument of the employee and premium shall be paid not later than the date of the commencement of the cover.
Where the employer failed, refused or omitted to make payment as and when due, the employer shall make arrangement to effect the payment of claims arising from death of any staff in its employment during such period. This is subject to such guidelines as may be issued, from time to time by the PenCom. Section 115 of PRA 2014 states that PenCom may make regulations, rules or guidelines as it deems necessary or expedient for giving full effect to the provisions of the Act and that the contravention of any regulation issued in pursuance of any of the provisions of the Act shall constitute an offence and shall be punishable as prescribed in the particular regulation.
Section 8 of PRA 2014 provides that where an employee dies, his entitlement under the life insurance policy shall be paid by the underwriter to the named beneficiary in line with section 57 of the Insurance Act.
One of the strategies adopted by PenCom to enforce compliance with the group life insurance policy is by making it mandatory for employers to display group life insurance certificate in a conspicuous place within their premises. The revised guidelines of group life insurance policy for employees, jointly issued by the National Insurance Commission (NAICOM) and PenCom provides in section 5.4 that each employer shall obtain a group life insurance certificate from an insurance company license and authorised to conduct life insurance business by NAICOM under the Insurance Act 2003.
While Section 5.5 of the guidelines makes it mandatory for the employer to display a copy of the group life insurance certificate in a conspicuous place within its premises for the information of the employees, and as evidence of having taken the policy; section 10.1 of the guidelines provides that PenCom shall impose administrative sanctions against any employer for non-compliance with the provisions of the guidelines.
Employers are reluctant in complying with the group life insurance policy and the provisions of the guidelines jointly issued by NAICOM and PenCom. In order to enforce compliance, the policy and the provisions of the guidelines and bring it to the attention of employees, PenCom issued a notice to all employers and employees on the subject matter entitled: “Re: compliance with PRA 2014 on Group Life Insurance Policy for employees and display of insurance certificate for 2021”. The notice advised employers who have not displayed a copy of the group life insurance policy certificate within their premises to do so on or before 31st July, 2021. It went further to remind them that failure to comply is a violation of section 4(5) of PRA 2014.
Secondly, employees can report recalcitrant employers to their unions, if the organisation is unionised. It is the responsibility of the leadership of local branches of trade unions in unionised organisations, whether public or private, to inform their national secretariats of the non-compliance of their employers and from there, it becomes the responsibility of the national secretariats to take up the issue with PenCom.
Section 99(1) of PRA 2014 provides that a person who contravenes any of the provisions of the Act commits an offence and where no penalty is prescribed, shall be liable on conviction to a fine of not less than N250,000 or to a term of not less than one year imprisonment or to both fine and imprisonment. Section 103 provides that when an offence under the Act is committed by a body corporate, the body corporate or every (a) director, manager, Secretary or other officers of the body corporate; (b) person who was purporting to act in such capacity mentioned in (a) above, who had knowledge or believed to have had knowledge of the commission of the offence and who did not exercise due diligence to ensure compliance with the Act shall be deemed to have committed the offence and shall be proceeded against in accordance with the Act.
Employees and their unions, have a duty to also enforce employers compliance with the provisions of section 4(5) (6) and (7) of PRA 2014 and section 5.5 of the Revised Guidelines on Group Life Insurance Policy for employees. The policy is taken in favour of the employees; therefore, they should be interested in their employer’s compliance. An employee can anonymously give information of non-compliance to PenCom and PenCom will act on such information without asking for the identity of the employee, in order to protect the employee from victimisation by the employer.
Secondly, employees can report recalcitrant employers to their unions, if the organisation is unionised. It is the responsibility of the leadership of local branches of trade unions in unionised organisations, whether public or private, to inform their national secretariats of the non-compliance of their employers and from there, it becomes the responsibility of the national secretariats to take up the issue with PenCom.
The group life insurance policy is meant to give protection to families and other dependants whose breadwinner-parents have died. It is therefore incumbent on all, not only PenCom, to ensure compliance with the provisions of the PRA 2014 and the guidelines.
