Insurance: True Stories

The insurance industry in Nigeria “suffers in silence” because nobody wants to see anybody suffer due to making reports that can lead to the prosecution of the other(s).

Whether they be fraudulent policyholders or professional colleagues, so many have been allowed to walk away without news reports or referring them to law enforcement agencies.

Little wonder, some years ago, a middle-aged Nigerian diagnosed with a terminal ailment brazenly decided to test the strength of the insurance industry by approaching about ten (10) Life Specialist Companies to buy Individual Life Assurance policies.

If you know how Life Assurance policies work, you’ll understand that if you take up a policy for 5 years but die in the first year, your beneficiaries will get the benefits that they would’ve been paid in the 5th year.

So Adolphus (not real name) knew this well enough when after confirmation of his ailing condition, he began to approach the insurance companies one after the other to buy Individual Life Assurance policies. Indeed, he bought two policies from a particular company. Sum Assured (payable upon death) was N10 million in each case.

Each of the 10 Life Specialist Companies requested him to do a medical examination and most of them used the same hospital, which aided his plan. He was given a clean bill of health and the Assurers confirmed cover!

Adolphus worked in concert with his Wife and Lawyer. Within the first year of the policies, he was reported dead from an accident where his car veered off the road and hit a tree. He was taken to the hospital where he did the medical examination for the Assurers and confirmed dead.

Two days later, while he was still in the mortuary, his Lawyer wrote to all the 10 Life Specialist Companies attaching a copy of Death Certificate that Adolphus had died, and they should be prepared to pay the claims. N10 million was a lot of money then!

The following month, the Life Offices Committee of the Nigerian Insurers Association met and the case of Adolphus was shared by one, two, three companies before others confirmed he had policies with them and they had received similar letter from his Lawyer about his death, thence claims.

Trust insurance companies then, when you report a claim, the first thing was to suspect the claimant; and in a Life Assurance case that involved many Assurers, the case of Adolphus was “screaming redflag”!

The insurance professionals went to work digging into their respective documents and it was discovered that one of the companies he approached declined cover because the medical examination report revealed that Adolphus had a terminal ailment!

This instigated an Emergency Meeting of the Committee and it was agreed that Legal Advice should be sought and no company should honour the request of the Lawyer to pay claims. As is usual for insurance companies, some went further to seek to reconfirm and possibly avoid the bad image non-payment of the claim may cause.

A few days later, it was confirmed by a team of legal luminaries that indeed the case of Adolphus was a ruse and an attempt to defraud the Life Specialist Companies. They were advised to take legal action against the Lawyer and family of Adolphus.

Now, here’s where the story became that of lawyers, after all, the insurance industry in Nigeria had been saved from a well-articulated plan to defraud it.

We simply went back to our business of selling and never heard the end of it, but I do know that there are many insurance professionals involved at that time that may have followed it to the end and can share with us.

Point to note is that the insurance industry never made a public show of the Lawyer or Wife to Mr. Adolphus, and have had repeated unreported cases of frauds till date. Or have you read about any fraud case concerning policyholders or CEOs of insurance companies?

If insurance must work for us in Nigeria, this is one aspect that needs to be addressed. We cannot continue to conceal the activities of our devourers and expect the industry to be transformed.

I remain…

Assuredly Yours,