Reps to investigate multi-billion naira fraud in insurance companies

The federal house of representatives on Tuesday resolved to investigate brokerage firms, insurance and reinsurance companies operating in the country over a multi-billion fraud.

The house also compelled the head of service of the federation and other government establishments that purchase direct insurance covers to provide detailed data of all premium paid on government assets within the last three years.

The resolutions of the house were sequel to a motion on matters of public importance sponsored by Prestige Ossy, representing Aba north/south at the house.

He noted that N35 billion was appropriated and expended on insurance covers of fixed and non-fixed government assets in the 2015 budget.

“At the beginning of every year, brokerage firms, insurance and reinsurance companies are invited to bid for insurance of government fixed and non-fixed assets, “Ossy said.

“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 bids.”

The lawmaker explained that the companies in fraudulent practice termed return on premium, where a percentage as high as 50 percent of premium paid by government are returned to government officials in cash.

“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”.

He added that if this is not checked, billions of naira meant for other pressing national needs will continue to go into private pockets.

The house adopted the motion after it was put to a voice vote by speaker Yakubu Dogara.