• Tuesday, June 25, 2024
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Reps to probe N35bn spent on insurance of public assets

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nigeria_repsThe House of Representatives on Tuesday unveiled plans to investigate the utilisation of the sum of N35 billion expended on the insurance covers of fixed and non-fixed government assets in the 2015 Appropriations Act.

The resolution was passed following the adoption of the motion under urgent national importance on urgent need to investigate the “fraudulent multi billion naira cash payments to government officials annually by insurance companies mandated to insure government fixed and non-fixed assets by way of return on premium.”

Leading the debate, Prestige Ossy (PDP-Abia) alleged that “for every N10 billion paid as insurance premium by government, N5 billion is returned to corrupt government officials.”

While expressing concern over the spate of corruption within the civil service, Ossy said: “at the beginning of every financial year brokerage firm, Insurance and Reinsurance companies are invited to bid for insurance of government fixed and non-fixed assets. 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 bidding processes.

“The unduly favoured companies reciprocate by engaging in a fraudulent practice termed Return on Premium, whereby a percentage as much as 50% of the premium paid by government are returned to government officials as cash pay back 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, N5 billion is returned to corrupt government officials.”

While calling for the House intervention, the lawmaker noted that if this alleged criminal practice is not checked, billions of naira meant for other pressing national needs would continue to go into private pockets not to mention the adverse effect on the national economy.

To this end, the House resolved to constitute an Ad-Hoc committee to compel the Head of Service of the Federation and other statutory government establishments that purchase direct insurance covers to provide detailed data of all premiums paid on Group Life (general) and related government assets within the last three months.

The Adhoc committee was also mandated to investigate the complicity of brokerage firms, Insurance and Reinsurance companies in the alleged multi-billion naira return on premium practice and also carry out an in-depth audit of the selection process and execution of such covers by government assets underwriters with the view of “eradicating this fraudulent process.”