As the National Insurance Commission (NAICOM) validate the 2016 financial accounts of the 58 insurance firms, those that fail to submit accounts or do not meet the Commission’s standard at the end of the verification may lose their operational licences in line with the Insurance Act of 2003.
NAICOM regulation requires insurance firms to submit their financial statements on or before June 30th every year; else they would be barred from engaging in further business activities.
The Insurance Act imposes a daily fine of N5,000 against firms that failed to meet the June 30th deadline. Spokesman for NAICOM, Rasaaq Salami, told The Guardian that accounts so far approved by NAICOM as at June 13th include: FBN Insurance Life, FBN General Insurance, Sovereign Trust Insurance, Royal Exchange, Custodian and Allied Insurance, Custodian Life Insurance, Law Union and Rock and AIICO Insurance.
Also approved are NEM Insurance, Unity Kapital, Fin Insurance, Consolidated Hallmark, Cornerstone Insurance, Royal Exchange, Prudential, Standard Alliance Life, Lasaco Assurance, Wapic Life Insurance, Wapic General, Ensure Insurance, and AXA Mansard Insurance.
Others are Prestige Insurance, Regency Insurance, Leadway Assurance, Staco Insurance, Mutual Benefit Life, Mutual Benefits Assurance Plc, Continental Re, Zenith General Insurance, and Zenith Life.
According to him, out of the 41 insurance companies that submitted their 2016 accounts, NAICOM approved 32, and queried the accounts of nine companies namely: ARM Life, Nigerian Re, UBA Metropolitan Life, Sterling Assurance, KBL Insurance, Linkage Assurance, Standard Alliance General, Niger Insurance, and Guinea Insurance.
About 13 others are yet to submit their audited accounts to NAICOM, and have till June 30th to do so. They include Goldlink Insurance, Nicon Insurance, IGI, IEI, African Alliance, NAIC Insurance, Unic Insurance, Great Nigeria Insurance.
Salami cleared the impression created by some news medium that have wrongly reported that the Commission gave March 31st, 2017 deadline, saying it was not NAICOM but the Nigerian Stock Exchange (NSE) that ordered the 20 quoted insurance companies to submit their audited accounts.
The Commission maintained that the decision to impose sanctions on defaulting companies became necessary, as their action deprives the Commission, policyholders, insurance intermediaries, analysts and other stakeholders of the relevant information about their performance and financial conditions.
“The Commission is poised to implement relevant measures to discourage companies from filing late returns and sanction errant ones appropriately. Amongst others, this will include a detailed review of their accounting and financial reporting systems, restriction of certain activities until relevant returns are filed; action against officials accountable for financial reporting as well as publicising the compliance status of insurance institutions on our website for public guidance,” it said.
NAICOM also advised boards of companies to take interest in the timely filing of returns, which, incidentally, contain information they need to effectively perform their oversight function, adding that the non-rendition of returns is an indication of the failure of the Board.
It noted that to facilitate the timely rendition of returns, it will carry out a review of the current returns requirements and streamline them for more efficiency in preparation and submission.
The President, Association of Registered Insurance Agents of Nigeria (ARIAN), Olamerun Gbadebo, who spoke to The Guardian on the telephone at the weekend, commended NAICOM for the proactive move to check financial statements of insurance companies show that the sector is ready to move forward.
He urged the stakeholders in the industry to join hands to support the Commission to drive home its agenda, noting that 32 out of the 58 firms is not good enough as this also indicates that the sector still needs to do more work in order to have 95 per cent in the 2017 financial year.
Gbadebo, said that as the nation is going digital, tasked the commission to make use of cloud where every information would be in there for stakeholders in the sector to be able to view them.
The Head Corporate Affair & Human Resource, Nigerian Insurers Association (NIA), Davis Iyasere, told The Guardian that it is a wakeup call to the insurance firms.
He, however, advised those companies that yet to submit their 2016 financial accounts to do so before the expiration of the deadline because it is what the law demands.