The ‘mathematical fraud’ of the NSS Insurance deductions

The National Service Scheme (NSS) has launched an insurance package for all national service personnel.

The launch, which was held at the premises of the scheme’s headquarters, had NSS Board Members and National Service Personnel Association executives and other stakeholders in attendance.

This compulsory insurance package spearheaded by various insurance companies, is expected to pay claims to service personnel who get involved in accidents in their line of duty.

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The claims vary from GHc 15,000 in cases of death or incapacitation, and gh3,000 for cases of temporary disability.

As part of the insurance package, National Service personnel are entitled to a GHc 500 loan which is payable within six months.

Service Personnel will also be charged GHc 15 on a monthly basis as insurance deductions for the package.

However some National Service Personnel are unhappy with the mandatory insurance policy launched by the National Service Secretariat.

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I decided to take a holistic look at mathematical calculations of the whole package:

2017/2018 service year NSS personnel deployed is 91,871 (For the purposes of our calculations let’s assume 90,000 personnel accepted posting to do their service this year)

Monthly allowance per personnel excluding bank service charges – GHc559

Deduction for Insurance per personnel per month – GHc15

BREAK DOWN:

Estimated contributions towards Compulsory Insurance per personnel for the 12 service months – GHc15 × 12 = GHc180

Estimated contributions towards Compulsory Insurance by 90,000 personnel per month – GHc15 × 90,000 = GHc1,350,000

Estimated TOTAL contributions towards Compulsory Insurance by 90,000 personnel at the end of 12 service months – GHc180 × 90,000 = GHc16,200,000

ESTIMATED CLAIMS:

Death & Permanent Disability ~ GHc15,000
Temporary Disability ~ GHc3,000

Let’s assume 200 service personnel die or are permanently disabled each service year – GHc15,000 × 200 = GHc3,000,000

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Let’s assume 200 personnel are temporary disabled each service year – GHc3,000 × 200 = GHc600,000

Estimated TOTAL of all paid claims at the end of service year – GHc3,600,000

Estimated TOTAL Contribution minus Estimated TOTAL Paid Claims – GHc16,200,000 – GHc3,600,000 = GHc12,600,000

Where does the unclaimed deductions go :

1. Would NSS personnel get a fraction of their contributions as a refund for the compulsory contribution?

2. Would the insurance company deduct their service charges & hand over the unclaimed deductions to the NSS Secretariat?

3. Is the NSS Secretariat going to splits the unclaimed deductions with the Insurance Company?

4. Or are they going to deposited in the Provident Fund?

This looks like another CREATE, LOOT & SHARE package. The NSS should come again wityh clearer explanation for better understanding.