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MDAs owe insurance companies N24bn

22 February 2013, 16:01

Lagos  - The Federal Ministry of Finance says government agencies owe N24 billion premium debts to insurance companies.

This was contained in a circular with ref. no: F15441/S.11/111/312 issued by the ministry and made available to the News Agency of Nigeria (NAN) in Lagos on Friday.

The circular was signed by Dr Yerima Lawan Ngama, the Minister of State for Finance.

The circular said that it was not proper that these agencies owed the debts in spite of the yearly budgetary provision for the premiums by the government.

 ``The ministry is making effort to end the menace and era of non- remittance of insurance collections and premiums.

``It is aiming to consolidate the ongoing effort to sanitise the insurance industry.

 ``The MDAs and other stakeholders are directed by this circular to make returns on premium collected and remitted to the National Insurance Commission in compliance with Section 50 of the Insurance Act,`` the circular said.

It said that any agency that failed to comply with the directive to pay their debts would be sanctioned.

It said that any insurance contract entered into without full payment of premium in advance would be legally unenforceable.

The circular said that payment of premiums would help insurance companies to meet their obligations.



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