Fund Administrator Mark Aguon told the members of the House of Representatives during Friday’s session to support the passage of House Bill 17-77 which seeks to repeal in its entirety a law codified as the “Retirement Fund Contribution to Life Insurance” so that the pension agency can negotiate for only one group life insurance for both retirees and active government employees.
“There will be no life insurance by July 1st if we can’t negotiate,” Aguon told lawmakers but did not specify the firm’s name.
He said the current life insurance policy of the cash-strapped CNMI government mandates that the beneficiaries of the insured get the equivalent of twice the amount of his salary in case of death.
If H. B. 17-77 is enacted into law, it would remove restrictions in securing a group life insurance policy for all retirees and active employees which will result in lower premiums.
Last year, the government paid over $1 million in life insurance benefits for the death of 12 employees.
Aguon said if they can negotiate for a group life insurance policy, the $4.5 million annual premium will go down by $1 million.
But the life insurance coverage will be limited to just $10,000 per person.
Lawmakers said this is very low and enough only to buy a casket.
Aguon said the policy-holders can get a supplemental coverage at their own expense.
“The goal is to get cheaper coverage for everybody,” he said.
According to Aguon, there are currently 3,100 retired CNMI employees.
He said the average age of public employees covered with life insurance in the CNMI has gone up to 43 from 40.
“What I am trying to say is we’re getting older. It is more difficult to negotiate,” he said.
