An injured police officer at Mandera Referral Hospital on July 1, 2015.
| Manase Otsialo | Nation Media GroupNews
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Sh17bn insurance shame and why police, civil servants risk losing cover
What you need to know:
- Insurance companies have written protest letters to the Ministry of National Treasury over delays in paying a total of Sh17.9 billion premiums.
- There is a risk that over 300,000 civil servants, as well as 120,000 police and prison officers will soon lack medical cover and WIBA Insurance schemes.
A consortium of insurance companies providing medical and group life cover for civil servants, the police and prisons services has threatened to suspend their services over the government’s failure to pay premiums.
Britam Life Assurance Co (K) Limited, CIC General Insurance Limited and Jubilee General Insurance have written protest letters to the Principal Secretary, Ministry of National Treasury and Planning, Chris Kiptoo, and the Principal Administrative Secretary, National Police Service (NPS), Bernice Lemedeket, over delays in paying a total of Sh17.9 billion premiums.
Consequently, there is a risk that over 300,000 civil servants, as well as 120,000 police and prison officers will soon lack medical cover and WIBA Insurance schemes.
Police Spokesperson Resila onyango told The Weekly Review that only the Ministry of Interior could comment on the matter. “Iam sorry I cant comment on the issue. Please talk to the Interior ministry spokesperson,” she said.
The consortium of insurance companies has informed the National Treasury and NPS that the delay in remitting premiums had affected compliance with regulation and negatively interfered with effective settlement of claims and delivery of their mandate as outlined in the contract, which poses a threat to their reputation as insurance underwriters.
The National Treasury hasn’t paid premiums for the cover period between April 15, 2022 and April 14, 2024, amounting to Sh17,930,543, 786.80.
“This is, therefore, to notify you that whereas we desire to continue being of service to you, we shall be forced to suspend service should we not receive full settlement of the outstanding premiums,” a letter from one of the insurers says. CIC General Insurance Ltd, in their reminder letter to Lemedeket dated October 2, 2023, titled, ‘Payment reminder and suspension notice – National Police and Kenya Prison Service Medical Scheme’, claimed Sh4,334,999,999.
“We have significantly stretched our medical service providers’ ability to sustain credit facilities due to the delayed payments. As we seek to mitigate on the risks associated with the delay, we will be introducing a co-pay of Sh1,000 for every visit effective October 6, 2023. While we have shared the invoices and documentation necessary for payment to be done, we remain available should you require any further clarification on the outstanding. Should you have settled the balance, kindly share the payment confirmation details with us for our records,” states the letter signed by CIC General Insurance Ltd boss Fredrick Ruoro.
Questions and reminders sent to Kiptoo for his perspective on the issue had not been answered by press time.
According to the civil servants cover scheme for the period between April 15, 2022 and April 14, 2023, the National Treasury was supposed to pay a premium of Sh3,407,160,774 but only paid Sh1,015,361,401, retaining a balance of Sh2,391,799,37.
Between April 15, 2023 and July 14, 2023, the National Treasury was expected to pay Sh801,830,515, but paid nothing.
The last batch of the premiums of Sh2,405,491,545, which was to cover the period between July 15, 2023 and April 14, 2024, Group Life and Last Expense cover has not also been paid.
“This delay in collection of premiums has not only caused disruptions in service delivery to the scheme with claims remaining unpaid since August 2022, but is also threatening regulatory sanctions on the insurers that carry the risk. We are, therefore, unable to continue with service provision and shall be forced to cancel the scheme if payment of the outstanding premium is not received within 30 days.”
There have been complaints by civil servants, NYS staff, police and prison officers over interruption of services following delayed or non-payment of premiums. On August 2, the Public Service, Gender and Affirmative Action Principal Secretary in charge of State Department for Public Service, Amos Gathecha, requested Kiptoo to release premiums totalling to Sh11.6 billion to facilitate the settling of claims.
Gathecha observed that Executive Order No.1 had transferred the functions of provision of Comprehensive Group Life, Last Expense, Work Injury Benefit Act and Group Personal Accident insurance covers for civil servants and NYS staff had been transferred from the Treasury to the State Department of Public Service.
“It is noted that in the contract from April 15, 2022 to April 14, 2023, there was an outstanding premium of Sh4.8 billion owed to the National Health Insurance Fund (NHIF), being the administrator of the covers, which has not been settled to date. It is further noted that the premium of Sh6.8 billion for the current contract period from April 15, 2023 to April 15, 2024 needs to be paid to NHIF. The purpose of this letter, therefore, is to request the Treasury to make arrangements to pay premiums totaling to Sh11.6 billion to facilitate NHIF to settle the claims arising from the stated covers,” states the letter from Gathecha to Kiptoo.
On April 14, 2023, NHIF awarded tender No. NHIF/DP/003/2022-2023, Provision of Co-Insurance and Facultative insurance services for Group Personal Accident (GPA) and Work Injury and Benefits Act (WIBA) covers for civil servants and NYS employees to Jubilee Allianz General Insurance K. Limited for Sh2.488,462,744.00 and Britam Life Assurance Company Ltd tender No. NHIF/DP/002/2022-2023 Provision of Co-Insurance and Facultative insurance services for Group Personal Accident (GPA) and Work Injury and Benefits Act (WIBA) covers for Sh 2,641,969,181.00 to commence on July 15, 2023.
