The House of Representatives on Tuesday expressed concern over more than N35 billion allegedly appropriated and expended on insurance of fixed and non-fixed government assets in the 2015 budget.
The reaction of the lawmakers followed a motion under matters of urgent public importance raised by Rep. Ossy Prestige (APGA-Abia), which was unanimously adopted by members through a voice vote.
Moving the motion, Prestige said on every N10 billion paid as insurance premium by government, N5 billion was being returned to corrupt government officials.
According to him, at the beginning of every financial year, brokerage firms, insurance and reinsurance companies are invited to bid for insurance of government fixed and non-fixed assets.
He 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 bid.
“The unduly favoured companies reciprocate by engaging in a fraudulent practice termed Return on Premium.
“A percentage as much as 50 per cent of the premium paid by government is returned to government officials as cash pay back, thus creating the biggest recurring fraud in public sector.
“To 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.”
The lawmaker explained that if this alleged criminal practice was not checked, billions of Naira meant for other pressing national needs, would continue to go into private pockets.
After the approval of the motion, the House resolved to constitute an ad hoc committee to compel the Head of Service of the Federation and other statutory government establishments that purchase direct insurance covers to provide detailed data.
They said the data would include all premiums paid on group life and related government assets within the last three months.
The House further resolved to investigate the complicity of brokerage firms, insurance and reinsurance companies in the alleged multi-billion naira return on premium practice.
It will also carry out an in-depth audit of the selection process and execution of such covers by government assets underwriters with a view to eradicating the fraudulent process.