Millions of employees to benefit from life insurance

The National Insurance Commission (NIC) is in discussions to make group life and workmen compensation compulsory by law, as it seeks to protect employees and enable employers attract and retain the best of talent.

Simon Nerro Davor, Deputy Commissioner of Insurance, told the B&FT that the NIC, in conjunction with the Ghana Insurers Association (GIA) and Ghana Insurance Brokers Association (GIBA) intend to add the two products to the compulsory list.

"We intend to lobby government so that group life and workmen compensation (wc) are added to the compulsory insurance list," Mr. Davor disclosed.

The announcement by the regulator comes as a relief to millions of employees, who have longed for compensation and insurance cover for risks associated with their work.

When accepted by stakeholders and implemented, the workman compensation (WC) will mean that a workman who dies before retirement or gets injured in the course of work will be legally entitled to compensation and insurance cover from the employer, which is currently unavailable under the current Social Security and National Insurance Trust arrangement--except in the case of persons in the Ghana Armed Force.

Commenting on the impact it would have on employees, Atsu K. Menyawovor, Chief Executive Officer of Ghana Insurers Association (GIA), the umbrella body for insurers, said the two products will not only provide insurance cover for workers, but will also help to grow the insurance business.

"To make the workmen's compensation insurance compulsory in Ghana would be of great benefit to employers and employees. When the unexpected happens, the insurance company would step in and discharge all financial obligations on behalf of the employer," he said

He noted that "Group life insurance offers a more comprehensive protection for employees. This is a 24-hour cover without geographical limitations. It compensates for death in service due to both accidental and natural causes. It also compensates for temporary and permanent incapacitation of the employee and also caters for some critical illnesses that might plague the employee such as cancers and kidney diseases."

Typically, a Workman's Compensation insurance policy provides for legal liability coverage for compensation to employers for bodily injury or death due to accidents or occupational diseases arising out of and in the course of employment.

In most jurisdictions like Nigeria, workmen's compensation is the primary method by which an employer can demonstrate the ability to satisfy the obligations imposed by the worker's compensation statutes.

Aside the benefits it holds for millions of Ghanaian workers, the two products, when passed into law, will also help grow the premiums of insurance companies.

It is also expected to increase insurance penetration, from it its current two percent to an appreciable level, and ultimately increase the contribution of the insurance sector to the national economy.

On the part of the employer, it leads to increased productivity, attract and retain talent and also comes with tax benefits, as the amount contributed by the business towards the group life plan is considered as business expense and not included in its profit.