The House of Representatives on Monday made more revelations on how Ministries, Departments and Agencies of government allegedly connived with insurance firms to defraud the Federal Government under the guise of paying insurance premiums.
An ad hoc committee of the House, which is investigating such fraudulent practices, cited how the Nigerian Maritime Administration and Safety Agency and the Nigerian Railways Corporation both paid premiums totalling N288m on non-functional properties.
While NIMASA reportedly insured a non-functional lift and paid premium on the equipment for three years, the NRC was said to have insured ‘dead’ generators.
The payments covered 2013 to 2015.
The Chairman of the committee, Mr. Adekunle Akinlade, who said this at the resumed sitting of the committee at the National Assembly, revealed how lawmakers visited the affected agencies to verify their insurance records only to discover that they lied.
He explained, “We went there to verify their claims and were surprised that for three years, NIMASA had a lift that never worked for one day, yet they were paying premium on it.
“The staff there told us that the lift never lifted a single person for one day.
“Then, there was the case of generators in the second corporation. They insured four, but three were already dead.
“But, each passing year, they paid insurance companies money for the four, including the three that were dead.
“There were really no insurance covers; money was just signed out, our money was taken into somebody’s pockets.”
Akinlade added that the committee found out that the MDAs used insurance as a “convenient conduit” to divert public funds to private pockets, a reason most of them assigned insurance duties to officials, who had limited knowledge of insurance transactions.
“Almost all the MDAs have no trained insurance personnel as schedule officers.
“You are signing billions of Naira on insurance, yet you have no trained insurance persons to man such an important area. It is deliberate,” he said.
On Monday, the committee examined the books of the Nigerian Postal Service, which entered a fire insurance cover with Regency Alliance in the value of N37.6bn.
It turned out that an “overpayment of N17.8m” had been made to the insurance firm.
In another instance where the insured cover was N772.2m, the committee observed another infraction.
“The premium represents 100 per cent of gross premium invoiced, as against 40 per cent, which would be N6.7m.
“The underwriter was paid N10.1m. Besides, at the time you carried out this transaction, Regency was unlicensed,” the committee stated.
There was a third case where NIPOST again overpaid the underwriter by N20.07m.
The Post Master-General of the Federation, Mr. Bisi Adegbuyi, quickly absolved himself of involvement in the questionable transactions.
“I resumed duties only three months ago; in August, Mr. Chairman. The schedule officers will be more useful in making explanations, “ he told the committee.
The PMG pushed forward the Deputy Director, Finance, Mr. Usman Shabah, and the Assistant Director, Insurance Schedules, Mr. Peter Anzah, to defend the transactions.
But, like the PMG, Shabah also claimed that Anzah was directly in charge and should explain the transactions.
When lawmakers asked Anzah his educational background, he replied, “I didn’t study insurance.”
When asked to account for the differences in figures, he replied, “I don’t know where the differences came from.”
On the question on the criteria used by NIPOST in appointing brokers or other firms, knowing that they were not licensed, Anzah answered, “We don’t advertise, we select them based on their proposals.”
Taken aback by the response, another member of the committee, Mr. Gabriel Onyemife, asked again, “Are you aware of the Public Procurement Act? I can read it to you.”
The director replied, “They forward their certificates to us before we give them offers. The National Insurance Commission usually confirms that they are licensed.”
Following the intervention of the post master-general, who explained that it was likely that Anzah did not get his figures correctly, the committee gave NIPOST up till next week to fault its findings.
Members were also surprised that the Corporate Affairs Committee was caught in the same web of engaging unlicensed firms.