“The Ogun State Government has urged transport unions operating in the state to embrace its ‘Welfare Insurance Policy,’ saying the scheme avails them the opportunity to save for the rainy day.”
What in the preceding statement suggest that Ogun State plan to insure transport union or contribute in any way to the insurance policy? The state is recommending that the union and its members get welfare insurance which is laudable but at not time did the state suggest it will support such a policy financially.
Many people see insurance premiums as a free gift to insurance companies particularly when they go for years without any payout. While insurance coverage is intended to cover one in the event of the unexpected, most people don’t believe they are vulnerable.
The proposed N60/day works out to N21,915.00 annually is quite substantial for people with meager income and if Ogun State really want to help, the state must get involved by setting rules that make people feel they are not just being taken.
Simple to implement incentive structure like, no claim bonus if not standard must be required. Insurance companies have a tendency to raise premiums whenever the have to make a payout so the government must come down on the side of the citizens and require insurance companies to pay up 50% premium refund in any year a payout is not made. This allows them to make 50% on premiums and incentivize the insured to be more careful to avoid running afoul of the coverage. Everybody wins. Careful participants get rewarded for their care and attention and don’t have to be penalized for the shortcomings of the insured pool.
So while I applaud the interest of the State government, I submit that the state cannot claim to be helpful if all it does is advise Union member to get the insurance but also to see to it that insurance do right by union members.