HOUSE OF REPRESENTATIVES: As Reps probe FG’s multibillion naira insurance spending

IT is no longer news that the House of Representatives has commenced full investigation into the multi-billion naira allegedly expended on insurance covers of fixed and non-fixed Federal Government assets in the 2015 budget. The leadership of the House set up an Ad-hoc committee led by Honourable Adekunle Akinlade to investigate the multi-billion naira said to have been expended on insurance covers for government properties by Ministries, Departments and Agencies (MDAs).

The resolution of the House was sequel to a motion under matters of urgent public importance moved by Hon. Ossy Prestige, asking the House to compel the Head of Service of the Federation and other statutory government establishments that purchase direct insurance covers to provide detailed data that would cover premiums paid on group life and related government assets.

He alleged that for every N10 billion paid as insurance premium by government, N5 billion was returned to corrupt government officials. According to him, “Although the processes are presumably carried out in line with the Public Procurement Act, it is generally believed that some companies are unduly favoured during such bid. The unduly favoured companies reciprocate by engaging in a fraudulent practice termed Return on Premium.”

Speaking further he said, “a percentage as much as 50 of the premium paid by government is returned to government officials as cash payback, thus creating the biggest recurring fraud in the public sector.

“To best appreciate the magnitude of fraud being perpetrated, for every N10 billion paid as insurance premium by government, N5billion is returned to corrupt government officials,” the lawmaker stated. At the commencement of the probe, the committee vowed to unmask the perpetrators. The chairman of the committee who read the riot act maintained that “no intention to witch-hunt any individual, group of persons or organisation but rather carry out its mandate within the ambit of the law, which is to establish that monies were paid to civil servants.’

He, however, raised eyebrow over refusal of some government agencies to make submission to the committee.

The government agencies that failed to make submission to the committee according to the chairman include: Central Bank of Nigeria, the Nigerian Customs Service, Nigeria Security and Minting Corporation among others.

Settling for the main business, the adhoc committee grilled the Managing Director of Standard Alliance Insurance, Mr Bode Akinboye. The committee, while questioning the Standard Alliance boss, frowned at the document presented before it saying that they were bellow of expected standard. Particularly, the committee was not comfortable with the figures presented by the company’s Managing Director, to the extent that at a point, it questioned the N625,000 invoiced as gross premium on a vehicle worth N12.5 million insured by a Federal Medical Centre.

The committee also queried another N30 million worth insurance done by the company for Ministry of Works where it was paid N900,000 as against the N150,075 premium due to it, leaving a difference of N749,000. At a point, Mr Akinboye admitted that there were typographical errors in the document he presented before the committee. He, however, maintained that the company applied the standard practice in insurance business for its dealings.

Another company, Regency Alliance Insurance Plc, represented by its Executive Director, Business Development, Mr Sammy Olaniyi and the Executive Director, Operations, Mr Akin Adelakun, was equally faced with conflicting figures in their presentation.

At this point the committee asked the companies to produce documents related to their insurance dealing with the Federal Government as well as the detail of individuals that was paid the brokerage fees and the list of brokerage firms that enjoyed the brokerage fees.

In his presentation, NICON insurance Executive Director, Technical Services, Mr Akinsola Ale told the committee that since the privatisation of the company in 2015 the company did not enjoy government’s patronage.

As the committee  concludes its investigation, all eyes are on the committee as to what becomes of the probe it was asked to undertake, based on past experience of the previous committees set up for similar mission.