Faith Waigwa
Group Life Schemes
Insurance Regulatory Authority
IRA at least 60 days
IRA Ratings Guidelines for All Group Life Listed Risks
Jubilee Insurance
Kamotho Maiyo
National Police
Ogetto Otachi and Co Advocates
Public Procurement Administrative Review Board
The National Hospital Insurance Fund (NHIF
The UAP Consortium
UAP Life Assurance

Insurers contest Sh900m tender awarded to rivals

Civil servants may have to wait a little longer for their group life and last expense insurance cover following a case challenging the award of a Sh900 million tender.

A consortium of insurance firms, led by UAP Life Assurance, has approached the Public Procurement Administrative Review Board (PPARB) to contest the lucrative contract awarded to its rival, Jubilee Insurance.

The National Hospital Insurance Fund (NHIF) awarded the contract to the consortium of Jubilee, Madison and Geminia insurances at Sh890,455,966 on February 12 after it emerged as the lowest evaluated bidder.

The Jubilee-led consortium beat their rivals UAP, ICEA and Sanlam insurances, and Britam, CIC and Pioneer insurances that had each quoted Sh970,359,691.33.

SEE ALSO :Tender row jolts Sh900m life cover for public servants

The petitioner claimed the decision to award the tender to the Jubilee consortium and determine that the UAP-led consortium’s financial bid was not competitive was not in line with the tender stipulations.

The application for review was made at the Faith Waigwa-led board on February 26, with the hearing of the application scheduled for hearing today.

Beneficiaries, who include 150,000 workers in the national and county governments, 162,000 police officers and prison warders, and 8,000 employees of parastatals and agencies, have now been left without cover after the current one expired on December 31 last year.

The cover ensures that if an employee was to die unexpectedly, their family would be able to cope financially. Last expense, for example, covers funeral costs such as mortuary fees and buying a coffin, among other expenses.

In the civil servants scheme, officers in Job Groups A-G would be entitled to Sh700,000 for group life and Sh100,000 for last expense, while undersecretaries would benefit from Sh30.8 million for group life and Sh300,000 for last expense.

SEE ALSO :Union threatens to call strike over allowances

National Police members are only entitled to last respect cover, with all cadres getting a uniform Sh250,000.

In parastatals and other institutions, workers in the lowest cadre are entitled to Sh850,000 for group life and Sh120,000 for last respect, while the senior-most staff qualify for Sh5 million for group life and Sh300,000 for last respects.

Through Kamotho Maiyo and Mbatia Advocates, UAP Life Assurance wants the PPARB to either compel NHIF to award them the deal or start the evaluation process afresh.

The firm claims the tender required bidders to submit competitive financial quotations (premiums) as approved by the Insurance Regulatory Authority (IRA), which was allegedly violated.

In the guidelines cited, an insurer is required to give a minimum recommended rate (percentage) for Group Life Schemes of 5.5 per Sh1,000 of the amount assured.

SEE ALSO :Civil servants threaten to down tools over allowances

The insurer says the IRA regulations explained the reason why the two losing consortia tied at the same price.

“The UAP Consortium’s financial bid was in line with the IRA Ratings Guidelines for All Group Life Listed Risks, April 2012,” UAP says.

However, NHIF insists on the new regulations of 2016, which came into effect on January 1 last year, following amendments of the Finance Act 2015 that the evaluation team relied on, that IRA abolished the percentage and allowed each firm to come up with its own rates, which must be filed with IRA at least 60 days before they are applied.

NHIF, through the law firm of Ogetto Otachi and Co Advocates, wants the application thrown out, saying the UAP-led consortium used obsolete regulations.

“But even more fundamentally is the fact that the said circular is no longer in force. NHIF is aware that IRA vide Circular number IC & RE 12/2016 dated November 3, 2016, directed with effect from 1st January 2018, the subject guideline no longer in force; hence would have no application to the subject tender,” NHIF says.

SEE ALSO :Civil servants initiate process to ditch NHIF

The tender was advertised on December 11, last year, with a January 3 deadline for return of bids.

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