Multi-million naira fraud rackets involving staff members of AIICO Insurance Plc and Mutual Benefits Assurance Plc, who defraud several unsuspecting policy holders and clients of their savings and funds, have been uncovered.
The rackets have in their ranks members of staff from the marketing and internal control departments of the respective firms as well as contract staff, agents and other intermediaries.
Investigations by our correspondent revealed that the rackets engaged in such fraudulent activities as non-remittance of insurance premium, forgery of clients’ policy documents to withdraw their savings, sending of fake savings credit alerts to clients, and unnecessary delay of claims, among others.
One major fraud case involving an AIICO Insurance client is that of a Lagos-based clergy, Pastor Sola Lawal, who subscribed to the Education Legacy Assurance Plan of the firm, through a staff of the company, Mr. Bode Aladesanmi, in 2013.
According to him, every quarter, he deposited N31, 250 (N125, 000 per annum) for the ELAP product through the staff and received alerts of the transactions from AIICO over a three-year period.
ELAP is a savings plan targeted at financing the future education of a named child in the event of death or permanent disability of the parent/ sponsor (policyholder).
Lawal’s plan was to use the savings to finance his daughter’s university education, having made up his mind to send the girl to Redeemers University, Ede, Osun State.
But in November 2016, he decided to terminate the contract due to other pressing needs and was assured by his account officer, Aladesanmi, that his balance would be ready within 14 working days.
To his dismay, he later began to receive several text messages and mails from the officer and some of his colleagues, pleading that due to some technical issues in the company the balance would not be paid earlier than the end of December 2016.
Lawal said, “I decided to give them the whole of January 2017 to make the refund. But I became impatient when I observed that Mr. Aladesanmi was avoiding my calls and messages. When I called his colleague, a certain Ms. Omotola, he dropped the bomb shell.
“I thought I was deaf when he told me that the cheque of about N200, 000 was given to my account officer instead of about N500, 000. When I inquired how the firm came up with such a meagre amount, he said I had not been consistent with the quarterly payment. At that point, I wanted to faint because I had never defaulted in the payment since inception in 2013.”
Since the end of January 2017, when the bad news was broken to the business administrator-turned Pastor, his account officer, Aladesanmi had stopped picking his calls and had gone missing. And, according to him, all efforts to get the company to hear his case had been unsuccessful as he was told by a staff that there was nothing the company could do.He was advised to locate Aladesanmi and sort things out with him.
Mrs. Olapade Adeyemi, a teacher, is another victim of the racket and alleged fraud at AIICO Insurance. As a teacher, who would be due for retirement before the end of this year, she had planned for the next phase of life in retirement by subscribing to an Annuity Savings Plan with AIICO.
AIICO’s annuity plan is designed to protect holders against the possibility of outliving their financial resources in retirement as it also provides a lump sum benefit in the event of the holder’s death.
She said, “I deserve to rest having served for 35 years. So, the idea of being able to earn monthly income after retirement made me subscribe to the Annuity Plan when Aladesanmi approached me. Since 2011, I have been paying N62, 500 every half of the year, amounting to N125, 000 every year and totalling N750, 000.
“I trusted him as a Sunday school teacher in our church and I used to receive alert. I stopped in June 2016, after five years, but he convinced me not to collect the money and that I should rather collect monthly income beginning from December 2016. But since last year, he has been calling me to explain that the company had hundreds of thousands policy holders to settle that I should hold on till February.
“I am confused now because it appears I have lost my savings. I cannot rely on pension after retirement because I know how much my senior colleagues suffer. That was one of the reasons I subscribed to the Annuity plan. How will I cope when I retire in a few months?”
Interestingly, further checks with sources at AIICO revealed that Pastor Lawal and Mrs. Adeyemi are only two out of the 25 people that have been allegedly fleeced by Aladesanmi and who were yet unaware of the discrepancies as at the time some of them were contacted by our correspondent.
Our correspondent obtained a list of the victims, which showed their names and respective outstanding balances, discreetly.
For security reasons, however, the names of the affected policyholders are withheld. The amounts involved in the case of each of the identified victims are: N2.45 million; N860,420:20; N782,926.50; N425,750; N475,860.10; and N355,940.20 and N110,550.40, respectively, for a couple, among others.
When our correspondent obtained Aladesanmi’s wife’s mobile number and contacted her on the whereabouts of her husband, again, it was revealed that the culprit had abandoned his wife and children at his residence around Oke-Aro area in Agbado, Ogun State.
The wife, who declined to disclose her first name, said, “I don’t understand what is happening because he left home about a month ago without telling me his destination. His lines are switched off. Though, I might not understand the issues you are talking about, but I trust my husband.”
At Mutual Benefits Assurance Plc, allegations are also rife from the insuring public, who alleged that some staff of the company, some of who are at the executive level, fleeced them of their hard earned money.
One of the complainants, a senior journalist in a news organisation along the Lagos-Ibadan expressway, who preferred anonymity, was allegedly defrauded by his kinsman from the North Central part of the country, who is a staff of Mutual.
I thought I was deaf when he told me that the cheque of about N200, 000 was given to my account officer. When I inquired how the firm came up with such meagre amount, he said I had not been consistent with the quarterly payment. At that point, I wanted to faint because I had never defaulted in the payment since inception in 2013
According to him, he had been making a deposit of N30, 000 for the Individual Savings Protection Plan product through his account officer and regularly received an alert of every transaction.
He was, however, shocked when he visited the company’s branch office along Town Planning Way, Ilupeju, Lagos State, unannounced, to check the status of his account and found that, though his name was in the company’s data base, his balance was far below his contributions so far, which the alerts he had been receiving also reflected.
“Sir, your balance is N150, 000 and that is because you failed to pay in some months. What I don’t understand is that your balance in our system is different from the credit alerts on your phone and most likely, the messages are not from us,” a customer care agent of the firm told him.
What happened to his balance? Who has been sending credit alerts to his mobile number? These were the questions he asked afterwards. He had not found answers to these questions as at press time.
He said, “I subscribed to the policy to save ahead for a book I want to publish before the end of this year, considering the incessant hike in price of commodities. The current economic recession has made things difficult and most organisations are even sacking employees in order to cut cost and mine might not be an exception.”
While the journalist remains confused on the necessary steps to take to recover his funds, scores of other clients of Mutual with similar complaints, who spoke with our correspondent in separate interviews, are worried as to whether they may yet be able to recover their funds.
While majority of them do not know what may be their fate, a few have, however, said they are ready to engage the insurance company in a legal battle.
One of them, a lecturer at the Lagos State University, Mr. Ayo Bello, is set to engage lawyers to petition the company over what he described as ‘robbing Peter to pay Paul’ as he alleged that some executive staff of the company fed fat on holders’ deposits.
Having made several attempts to meet with the management of the firm over his allegedly trapped N300, 000 Premium, which he deposited with the company in the last three years, he said his lawyers would take over the battle.
“I am ready to go to court. It will be better if some of us stand together to curb this menace because I know there are hundreds of holders that may be carefree about their savings. But if I don’t see anyone, I will fight my battle alone,” he said.
An Internal Control and IT expert, Debola Alatishe, however, told our correspondent that the frauds discovered in the Insurance firms could not be perpetrated alone but by a group of people working there.
“A good number of the cases in question were executed in connivance with either their colleagues in the internal control units or senior executive staff of the affected companies. This explains why victims of the fraud always never suspected foul play as they regularly got credit alerts of remittance of their payments to the marketers,” Alatishe observed.
GIVE US TIME TO INVESTIGATE – AIICO
When our correspondent contacted the Managing Director, AIICO Insurance Plc, Mr. Edwin Igbiti, to inform him and seek his reaction on the allegations against some of his staff members, he asked that the company be given time to investigate the allegations.
He said, “Inasmuch as I understand that some policy holders might have forgotten the details of the contract terms signed during registration, several clients have lodged fraud-related complaints to the company and we are investigating them. We assure all clients that the cases will be solved very soon.”
SECTOR LACKS PROPER REGULATION – EXPERTS
Experts in the insurance sector have, however, blamed the Federal Government for the observed infractions on customers’ savings accounts being witnessed in the sector.
Some of them told our correspondent that they expected the government to introduce proactive policies that would curb the menace and create an enabling environment for operators and the insuring public.
According to some insurance brokers, the sector lacks proper regulations that could allow it compete favourably with its counterparts in both the developing and developed economies.
A former president of the Nigerian Council of Registered Insurance Brokers, Chief Babajide Olatunde Agbeja, disclosed that Nigeria was among the few developing nations that lacked basic regulations that could either protect subscribers of insurance policies or operators in the sector.
Like what is obtainable in the Nigerian stock market, he argued that there should be a law that would empower only insurance brokers to place all insurance policies in the country at no extra cost.
He said, “If it was possible in South Africa and Ghana, among other nations, it should not be difficult to implement in Nigeria. A lot of Nigerians are dissatisfied with their settlement offers by insurance companies but could not argue their cases because they had not engaged brokers. Using insurance broking firm guarantees the public good analysis of their portfolio, processing of renewals and claims handling/settlement.”
Another broker, Dr. Sesan Adebayo, observed that greed on the part of the insurance companies was responsible for the delay of premium payment in most cases.
“What most insurance companies do not understand is that one satisfied customer is better than spending fortunes to advertise your company in the media. Claim processing can be simplified because people who trust you with their premium want their claims to be paid as soon as possible,” he said.
A good number of the cases in question were executed in connivance with either their colleagues in the internal control units or senior executive staff of the affected companies. This explains why victims of the fraud always never suspected foul play as they regularly got credit alerts of remittance of their payments to the marketers
A lawyer and consultant on Corporate Governance and Transparency, Mr. Oladele Solanke, attributed the development to the sector’s weak regulatory environment, which he said was a disadvantage to the insuring public.
He said, “These are cases of canvassers for insurance that are taking advantage of consumers of insurance’s ignorance to enrich themselves. Part of the blame goes to the affected companies while the chunk of the blame falls on the government and its agencies, who had failed to create an enabling environment for all stakeholders. “There is the urgency to discourage corporate rascality and misbehaviour.”
BLAME POLICYHOLDERS’ IGNORANCE – MUTUAL BENEFIT BOSS
However, the management of Mutual Benefit Assurance blamed the policy holders for what it described as negligence or ignorance.
Managing Director, Mutual Benefits Assurance, Mr. Segun Omosheinde, told The Point that he had never heard of such complaints or allegation of fraud before our correspondent’s enquiry.
While he assured that the organisation would investigate the allegations of fraud and lack of corporate governance, he argued that it was clearly and boldly stated in red letters in the policy documents that it was illegal for anyone to pay cash to any agent or staff.
“The ignorance of our people is disturbing. We understand issues like this could come up. That was the reason we introduced such initiative to curb fraud. Such people should not expect us to refund money that was not paid into our account. We will only investigate to clear the air but will not be responsible for such act,” he told The Point.
Alleged Fraud: AIICO suspends agent …reports case to Police
Meanwhile, the management of AIICO Insurance Plc has suspended and reported one of its agents, Mr. Bode Aladesanmi, to the police over alleged fraudulent practices.
The action of the management of AIICO Insurance followed an exclusive report by The Point newspaper last Friday on multi-million naira insurance scams reportedly perpetrated by agents and suspected staff of top insurance companies.
Managing Director, AIICO Insurance, Mr. Edwin Igbiti, told The Point that the suspect, Aladesanmi, who had been named in the scam as regards AIICO, was being investigated by both the management and the police for alleged fraudulent practices and misrepresentation of the company.
Igbiti said, “Consistent with our practice and in line with the processes in the company, upon receiving reports of the fraud allegedly perpetrated by Mr. Adesanmi, he was immediately placed on suspension, pending the outcome of an investigation that was commenced immediately, which is presently ongoing.
“While we empathise with those who might have fallen victim to this individual’s personal scam, we shall leave no stone unturned in pursuing the case to a logical conclusion and ensuring that all parties get the justice they deserve.”
He added that it was imperative to clarify the position of the company, which had been an underwriter for more than 50 years, and which he said was the largest life insurance underwriter in Nigeria and one of the biggest Insurance underwriters in the West African sub-region.
The AIICO boss said, “AIICO has since put in place a policy against the payment of cash to individuals. This is visibly indicated in our communication materials and policy documents. We have invested in technology and infrastructure to provide multiple payment channels for payment and renewal of insurance policies.
“We encourage our customers to continue utilising channels like Point of Sale terminals at our locations, Quickteller payment platforms, bank branches, AIICO e-Insurance Web Portal, Third Party Scratch Cards, Direct Debit and Cashier Points at our locations among others.”
The Point had reported that the exposed racketeers engaged in such fraudulent activities as non-remittance of insurance premium, forgery of clients’ policy documents to withdraw their savings, sending of fake savings credit alerts to clients, and unnecessary delay of claims, among others, without the knowledge of the top management of the companies.