Following regulatory directives, which transferred the management of Workmen Compensation and Employers Liability Insurance to the Nigerian Social Insurance Trust Fund (NSITF) under the Employers Compensation Act 2010, premium accruable to insurers has gradually declined by 88.5 per cent from N1.70 billion to N196 million in the last nine years.
According to details in the current edition of Nigeria Insurance Digest, a Nigerian Insurers Association (NIA) compendium of insurance business transaction in 2017, the industry recorded N1.70 billion in 2009 and followed with N903.24 million in 2010.
The gradual decline continued in the following years as N630.82 million was recorded in 2011, followed by N502.60 million in 2012. In the same vein, the total premium premium paid to the underwriters in 2013 and 2014 was N365.97 million and N270.74 million respectively.
The same process continued in 2015, 2016 and 2017 where the premium dropped to N205.44 million, rose to N233.27 million and further dropped N196.19 million respectively.
Workmen Compensation Act Employers Liability is one of the six Compulsory insurances in the country.
Others are Group Life Insurance in line with the PenCom Act 2014, Buildings under construction-section 64 of the Insurance Act 2003; Occupiers Liability insurance under section 65 of the Insurance Act 2003; Motor Third Party Insurance under section 68 of the Insurance Act 2003 and Health Care Professional Indemnity insurance under section 45 of the NHIS Act 1999.
Until recently, employers were in the habit of abandoning their workers, who in the course of duty, encountered any form of accident.
However, the situation started changing after the Minister of Power, Works and Housing, Mr. Babatunde Fashola, vowed to lead the campaign for compliance with the 2010 Federal Workmens’ Compensation Act by government contractors to ensure protection of their workers.
The minister said he would use his position to insist that all the state Controllers of Works took steps to demand and ensure that all government contractors provide proof of compliance with the law.
While pledging to do his best to ensure compliance and protection of Nigerian workers, he wondered how many of the various government contractors or private companies had such policies.
“It seems to me that insurance practitioners have a role to play here, by designing policies that are appropriately priced and by promptly responding to claims in order to boost confidence in the business of insurance,” he noted.
Recall that the Federal Government had signed the Employees’ Compensation Act into law to transfer the management of workers under the compensation to Nigerian Social Insurance trust Fund (NSITF).
It was concluded that the implementation of the Act and the management of the compensation fund established under section 56 of the Act were to be overseen by the board of NSITF.
While the battle between NAICOM and NSITF lasted, the NSITF, which is entrusted with the delivery of social security to Nigerian workers under the amended Pension Reform Act, 2014 reaffirmed its commitment to the full implementation of the Act while NAICOM on the other hand, stated that it carried out a review of the entire insurance laws including the existing Workmen’s Compensation Act, and had repackaged same as a consolidating legislation in line with international best practices.
The National Insurance Commission (NAICOM) had noted that the commission was strongly of the view that a consolidated approach to insurance legislation would be better than the piece meal approach advocated by the Employee Compensation Bill, while the management of NSITF said that the Workmen’s Compensation Act was obsolete, having been enacted in 1948 and being implemented by insurance companies.
The compensation act was established in order to provide an open and fair system of guaranteed and adequate compensation for employees or their dependants for any death, injury, disease or disability arising out of or in the course of employment.
It is applicable to all employers and employees in the public and private sectors, and an employee is entitled to compensation for mental stress arising from an acute reaction to a sudden and unexpected traumatic event arising out of or in the course of the employee’s employment.