/ 30 October 2008

Spooks shafted by dodgy insurance deal?

They are supposed to be South Africa’s insurance policy, the all-seeing eye that protects the country against internal and external threats, but staff at the National Intelligence Agency (NIA) appear to have been caught out by a suspect life-cover scheme.

Three sources, two of them inside the NIA, have independently told the Mail & Guardian that staff are fuming over what they believe is the evaporation of at least part of their life insurance premiums.

Rumours are rife about exactly what happened and, as with most things involving the secret world, precise details are hard to come by. Certainly some staff believe that the broker who sold the Momentum Life policies to the spy agency has absconded, apparently to the United States. ”The word is that he’s being looked for by the FBI,” one person familiar with the situation said.

Another senior NIA staffer, however, flatly contradicted that, saying that government auditors had noticed problems with the policies as early as 2006 and launched an investigation, but that ”there is no issue of brokers running away”.

NIA spokesperson Lorna Daniels did, however, confirm that a formal complaint has been laid with insurance industry watchdog the Financial Services Board (FSB), which the M&G has independently confirmed is investigating.

Spies apparently need life cover just as much as other people — probably more so — and deductions are made from all NIA staffers’ salaries to pay for one of two policy options with Momentum Life, a subsidiary of the First Rand group.

They can choose either a pure insurance option, in which case the policy pays out five times their annual salary in the event of their death, or a combined investment and life cover option, which pays out a lump sum on retirement and three times annual salary in the event of death.

According to people familiar with the situation, the investment contributions appear to have been made and are at least partially recoverable, but the life cover portion is in doubt. Amid the confusion, some staff aren’t sure which option they selected and now fear they may get nothing.

”It seems some of the documentation has gone missing, so it is difficult to prove anything,” said one.

FSB spokesperson Russel Michaels declined to comment, citing legal restrictions on releasing information about its investigations, and referred queries to the NIA.

Daniels, however, did not want to provide any further explanation: ”We do not wish to prejudice any party and therefore have no further comment,” she said.

Momentum’s corporate communications chief Tracy Egnos was even more tight-lipped, insisting that client confidentiality prevented the company from making any comment until it received explicit permission from NIA.

So just how badly out of pocket the cloak-and-dagger crowd are, you aren’t about to find out, and who is going to make good the loss, we can’t tell you, but they will no doubt argue that financial markets are distinctly short of intelligence right now anyway.