The National Insurance Commission (NAICOM) has commenced the implementation of guidelines on Code of Good Corporate Governance for insurance industry six years after initial resistance by operators.
Sign of the underwriting companies compliance with the regulatory requirements emerged when three insurance companies in the market held their yearly general meeting recently and the chairmen announced their retirement from the board of these companies.
According to the guidelines on composition of the board of directors of insurance companies says “without prejudice to the provisions of CAMA, non-executive directors shall not be re-nominated and appointed for more than three terms of three years each.”
Industry sources told The Guardian that the change of thinking of the practitioners may have been influenced by the change of guard at the National Insurance Commission with the appointment of Mohammed Kari as Commissioner for Insurance following the expiration of the tenure of immediate past commissioner, Fola Daniel.
His appointment was followed with the inauguration of the Insurers’ Committee similar to the Bankers’ Committee which comprises all the chief executive officers of insurance companies in Nigeria and created a platform to engage the commission on the issues and challenges of the sector and proffer solutions to foster insurance penetration.
With the new leadership and the release of various guidelines aimed at reinforcing standards and encouraging growing presence of foreign interest, the Nigeria’s insurance industry is taking a leap for further growth within the operating environment and creating an opportunity to effectively compete amongst the global insurance industry.
Hitherto, operators who initially resisted the regulatory requirements believe that it will wipe away highly experience professional management from the board.
Besides, practitioners who supported the new requirements believe that it will inject fresh blood into the companies that will bring new initiatives to drive the hostile business environment in the country to survive.
The outgoing chairman of one of the insurance companies in his farewell speech to shareholders after 21 years as chairman of the company said “I want to announce to you distinguished shareholders that this meeting will be the end of my tenure as chairman of your company. I want to thank you for your support during my tenure and I want to encourage all of you to continue to support the company, as the company will continue to perform very well in the future because of the caliber of management and board in the company to meet the expectations of all stakeholders”.
However, National Coordinator, Independent Shareholders of Nigeria, Sonny Nwosu, said “On behalf of shareholders of this great company, we want to thank you most sincerely for your dexterity and experience you have brought to bear in the performances of the company in the past 21 years. We wish you long life and good health to continue to contribute to the development of this country.”
According to the guidelines “corporate governance refers to the manner in which companies are directed and controlled. It encompasses the means by which the board and senior management are held accountable and responsible for their actions and includes corporate discipline, transparency, independence, accountability, responsibility, fairness and social responsibility. Corporate governance increases competitiveness and makes criminal activities more difficult. The presence of an effective corporate governance system helps to provide a degree of confidence that is necessary for the proper functioning of a market economy and economic growth. Its adoption is thus inevitable in the Nigerian insurance industry considering the critical role of the sector to financial market stability, investment and economic growth.”