Wednesday, December 5, 2012

Prestige Assurance pays $2.61 Million for Dana Air crash

The lead underwriter for the Dana aircraft that crashed on June 3, 2012 in Iju area of Lagos State, Prestige Assurance Plc, said it has contributed up to $2.609 million to make up for the $30,000 initial payment to relatives of each of the victims of the accident.

The contributed amount connotes 30 per cent of the total claims, while the remaining bulk 70 per cent comes from Lloyds of London, UK, the main reinsurer of the incident. Relatives of 81 victims of the air disaster have been paid, out of the 146 persons who lost their lives.

The insurer (Prestige Assurance Plc) absolved itself from all blame regarding delays in payment of the initial compensation to relatives of the crash victims, saying it was neither responsible for negotiating nor verifying claims made by the bereaved families and that its duties under the contract was limited to contributing its share of verified claims.

The Managing Director of the company, Dr. Anand Mittal, made these clarifications while fielding questions on the controversies trailing the payment of compensations to relatives of victims of the ill-fated aircraft in Lagos recently.

Some relatives of the crash victims have made allegations of irregularities and deliberate delay in paying the initial compensation on the trio of Prestige Assurance, the management of Dana Airline and the foreign reinsurer, represented by Yomi Osikoya & Co.

Some raised the alarm that they were said to have been paid the $30,000 initial compensation whereas they had not received any money from any of the parties while others alleged that they were short-changed by the trio, having been paid $15,000 instead of the full amount.

Some others accused the managements of Dana Airlines and Yomi Osikoya & Co of deliberately frustrating the payment process under various guises. Also, the aged father of one of the victims said the airline's management and legal representative of the reinsurer coerced him into going through a DNA test and securing a Letter of Administration and still refused to pay him or his proxy the said $30,000 initial compensation.

Responding, Mittal absolved Prestige Assurance from blame with regard to the complaints of the stakeholders, confirming that as at last week, the insurer has paid $2.609 million, being compensation to victims of the deceased and legal fees to relevant organisations handling various aspects of the claims.

According to him, Prestige Assurance's role stops at paying its share of verified claims on the advice of the legal representative of the reinsurer, Lloyds of London, Yomi Osikoya & Co., which is the firm handling all the claims on behalf of its principal.

He explained that, it is the responsibility of the reinsurer based in London to verify and negotiate claims arising from the accident through its Nigerian agent in line with the insurance contract as approved by the National Insurance Commission (NAICOM).

Mittal said under the contract the job of Prestige Assurance in its capacity as lead underwriter is limited to making available 30 per cent of every verified claims on behalf of all the co-insurers; adding that it was not concerned about how the reinsurer and its representatives arrive at the final claims figures.

According to him, 81 relatives of crash victims have received the initial $30,000 each, adding that the remaining 70 per cent of the claims would be paid to them when they meet the necessary claims conditions including presentation of valid letters of administration from the state government.

The global best practice in aviation insurance, according to him, is that reinsurers take full control of the claims process and appoint relevant professionals to help in verifying and negotiating claims filed by relevant stakeholders.

In addition, he pointed out that the Prestige Assurance did not enter into any contract with victims of the air crash and as such its duty stops at indemnifying the insured (Dana Group) to the extent of liabilities incurred as a result of the accident and not to negotiate individual claims with relatives of victims.

Explaining what the insurer did so far with regard to compensating the victims' families, Mittal said as soon as the company got wind of the accident, the insurer's officials attempted to physically inspect the crash site but were stopped by security officials who warned that it was not safe for them to do so.

The company thereafter summoned an emergency management meeting to deliberate on how to meet the expected claims and notified the main insurer and reinsurer, Lloyds Syndicate of London, which appointed Clyde & Co to handle all the legal formalities alongside its Nigerian representatives, Messrs. Yomi Osikoya & Co.

The management of Dana Airlines also set up two crisis centres in Lagos and Abuja respectively in line with legal and regulatory requirements, he added.

According to him, the payment of the initial $30,000 compensation to families of the crash victims ran into trouble when multiple relatives started laying claims to the benefit of some victims.

Mittal also dismissed any irregularity in the case of those who were paid $15,000 as against the mandatory $30,000, explaining that those were cases where two sets of beneficiaries are entitled to the compensation for same victims.

On the various allegations of irregularities on the part of the legal representative for Dana Group and Lloyds, the Prestige Assurance boss said those making the allegations should come up with proofs of the misbehaviours as alleged.

Meanwhile, the legal representatives for relatives of 40 of the crash victims, M. O. Awoyemi & Co. have called on the National Assembly, the Aviation Minister and President Jonathan Goodluck to prevail on Dana Airlines and the local and foreign insurers to speed up the payment process, to alleviate the suffering of those who lost their loved ones in the accident.

According to the law firm's Managing Partner, Mr. Bunmi Awoyemi, some of its clients were paid half of the statutory $30,000 while another was not paid at all even after his name has been published in various media as one of those who were paid.

He alleged that the Dana group and their insurers were deliberately frustrating the payment process to the detriment of the victims' relatives.

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