..says fines are regulated by law for infractions
THE Commissioner for Insurance/CEO, National Insurance Commission (NAICOM), Mohammed Kari, has advised shareholders of insurance companies to demand explanations from their respective managements to ascertain reasons they continue to incur sanctions from the regulator.
In his keynote address at the Champion Newspaper Insurance Day held in Lagos, said the commission sympathizes with the shareholders because they have a right to be aggrieved over the nil returns on their investments.
He said, for the benefit of discerning shareholders of quoted insurance companies and the general public, as a government agency that believes in the rule of law, NAICOM has never charged insurance institutions any levy outside the law that governs its operations.
Kari challenged the management of all insurance companies to make public the charges they have incurred from NAICOM which are outside the extant laws governing the sector. Besides, he urged them to make public the sum total of charges each company has paid to NAICOM at the end of a financial year in relation to their gross premium income that has culminated in their inability to pay dividends to their shareholders.
Apparently worried by complaints that excessive fines prevented insurance companies from paying dividend to shareholders, Kari said “On the issue of one per cent insurance levy, it is imperative to note that this is a statutory provision of the law and not a regulation of NAICOM. For the avoidance of doubt, section 16 (1)(b) of the NAICOM Act 1997 mandates all insurance institutions to remit one per cent of their gross premium to the commission as insurance levy.
This system of funding of regulators applies to most sector regulators in Nigeria – The FIRS, CBN, SEC, NDIC, PenCom, etc.”
“It may also interest the shareholders and indeed the general public to note that insurance is a regulated business. Operators who choose to play in the sector must be prepared to do so in strict compliance with the extant insurance laws. Fines and sanctions for any default/infraction by an operator are clearly spent out in the respective laws to the knowledge and understanding of the operators.
The law may not be perfect, but as long as it remains the law, its provisions must be complied with and it is the responsibility of NAICOM, as the statutory regulatory agency of the sector to ensure every operator play by the rule”.
NAICOM boss said “We will advise shareholders of insurance companies to demand explanations from their respective managements to ascertain reasons they continue to incur sanctions from the regulator; incur high management expenses; fail to take advantage of the huge potentials in the market and the various market development initiatives introduced by NAICOM to expand their businesses, grow their revenue income and improve on their bottom-line to guarantee enhanced dividend pay out to their shareholders. We are looking at these details and may be making them public in due course”.
Source: Guardian News