THE Nigeria Shareholders Association has accused the National Insurance Commission (NAICOM) of indiscriminate charging of insurance companies, saying this has affected the prospect of good investments in the country.
The association then called on the federal government to scrutinize NAICOM financial activities in the last five years hence there will be depreciation in the contribution of the industry to the Gross Domestic Product (GDP) of the country.
Chairrman of Dynamic shareholders Association of Nigeria, Alex Adio, who raised the allegation at a media parley said, “ as stakeholders in the economy, it is our responsibility to call the attention of the government to observe the anomaly which has all trappings of corporate corruption being perpetrated by the Commission. Their unwholesome charges on insurance companies is not only killing the public quoted companies but adversely affecting prospect of good investments in the industry in general. Hence, the excesses of the regulator if not urgently checked has the potential of depreciating the contribution of the industry to the GDP of the country.
“The insurance industry through her routine activities has contributed significantly to economic growth of the country. Yet negligence of investment in the industry is responsible for the noticeable negative relationship between total investment and GDP.
“Most. Insurance companies in Nigeria worked tirelessly to increase their gross premium but are weighed down and made unattractive to new investment by the burdensome charges of NAICOM, thereby leaving the existing equity owners at a point of hopelessness and financial crunch.
“The situation has become more discrediting and dangerous such that most insurance companies are now diverting part of their business/income into private companies (non-quoted) in order to avoid unwholesome levy charged by NAICOM. With that investors in non quoted companies have value for their investments in terms of commensurate dividends as returns on their investment, while shareholders of quoted insurance companies in Nigeria have little or no dividends accruing to their investments.
“Policy holders were reported to be on the increase by 2012, yet NAICOM approach to insurance issues has driven both local and foreign investors away from the sector with existing shareholders selling their holdings in order to invest in more productive companies. The questions could be asked: What then is the relevance of NAICOM in the sustainability of quoted companies? How does NAICOM administer its activities? Who regulates the regulators? What is NAICOM doing concerning the companies with outstanding AGMs?”
The association also called on the national assembly to amend the Act that empowered NAICOM if the country appropriate the huge investment available for the industry from both local and foreign investors.
“We consider as legal extortions on Nigerian shareholders the levy charged on gross premium and not on Profit After Tax (if necessary) as is the international practices. This call for the outright removal of one percent gross premium levy or download review of the levy to cater for shareholders interest as regard dividends pay-out and other benefits.
“ We as representatives of the thousands of investors are strongly concerned and would have to organise a One thousand- man shareholders’ walk to the National Assembly to register our protest. Though we have already taken some steps viz a viz forwarding petition to the Senate, House of Representatives, Security Exchange Commission, NAICOM and other relevant agencies.
Source: Guardian News