About six months after 2012 financial year ended and three months after the June 30 deadline given insurers for the submission of annual accounts, some insurance giants in the industry are yet to submit their International Financial Reporting Standard (IFRS) accounts to the National Insurance Commission (NAICOM).
According to the 2012 financial statements submission status of insurance companies byNAICOM as at August 27th, 2013, out of the existing 57 insurance companies and two re-insurance companies, 31 companies submitted their accounts out of which only nine got approval.
Veteran insurers like Industrial and General Insurance Plc (IGI), Royal Exchange Insurance Plc, NICON Insurance, Niger Insurance, Goldlink Insurance Plc, Mutual Benefit,Cornerstone, International Energy InsurancePlc (IEI), make the list of companies that are yet to submit their report.
Others are Union Assurance, African Alliance Insurance Plc, Alliance and General Life Assurance Plc, Capital Express, LASACO Life, Mutual Benefit Life, Anchor Insurance, Great Nigeria Insurance, Guinea Insurance, Linkage Assurance, Oasis Insurance, Staco Insurance, Standard Alliance Insurance, Universal Insurance Plc and Unic Insurance.
Out of this group, IEI, Cornerstone, Niger, Oasis, Staco, Standard Alliance and Universal Insurance are quoted on the floor of the Nigerian Stock Exchange (NSE) and risk suspension by the exchange.
Section 26 of the Insurance Act, 2003 states that failure to file annual returns constitutes a ground for cancellation of operating license and an insurer shall be deemed to have failed to file its annual returns if the provisions of Section 26 of the Act are not met 12 months after the end of the financial year.
The nine companies that got NAICOM’s approval are Mansad Insurance Plc, ADIC Insurance Ltd, WAPIC Insurance, Consolidated Hallmark Insurance, Oasis Insurance Plc, FBN Life Assurance Ltd, Continental Reinsurance Company Plc, AIICO Insurance Plc and Leadway Assurance Company Ltd.
Others like Custodian & Allied Ins. Plc, Unitrust Insurance Company Limited, Crusader General Ins. Ltd, UBA Metropolitan Life Ins. Company, NEM Insurance Plc, Law Union & Rock Insurance Company, Zenith General Insurance Ltd, Zenith Life Insurance Ltd, Standard Allied Life Assurance, Crystal Life Insurance, Sovereign Trust Insurance Plc, FIN Insurance Ltd, Unity Kapital Assurance Plc, Equity Assurance Plc, Lasaco Assuarnce Plc, Prestige Assurance Plc, PHB Insurance Plc, Regency Alliance Company have submitted their annual accounts but are being queried at different levels by the regulator.
At a parley with all the CEOs of insurers in Ibadan, the Commissioner for Insurance, Mr. Fola Daniel, expressed concerns over the delays in the submission of 2012 annual accounts and common errors noticed in the reports already submitted by some insurance companies.
At the meeting which was held behind closed doors, Daniel stressed the need to speed up the process to avoid further delays in the approval of accounts by the commission and warned of grave consequences of further delays of submission and approval of the accounts to the affected companies.
The Nation learnt that the commissioner who did not hide his disappointment over the development said the commission will not hesitate to wield the big stick when necessary.
Meanwhile before the meeting with the CEOs, NAICOM also held a meeting with Chief Financial Officers (CFOs) of the affected insurance companies where they accepted there were challenges but promised to do the needful.
The meeting was addressed by NAICOM Deputy Commissioner, Finance and Admin, George Onekhena and Director, Supervision, Nicholas Opara. The two officials also took time to address some areas of challenge to the companies.
But in spite of these meetings, the companies are still struggling and are yet to submit.
It was learnt that while some are having challenges in getting their auditors and actuaries perfect their accounts, others may have got their hands soiled with several irregularities and misstatement in the activities of their companies and are afraid of being exposed and sanctioned.
One of the embattled CEOs who spoke on condition of anonymity said his company has not submitted because of the issues of IFRS.
He said there are also challenges with external auditors as most of them have just changed their previous auditor as required by the law.
“But as I am speaking with you now, our CFO is in Abuja ready to submit the account to NAICOM,“ he said.
The managing director of one of the old insurance companies in the country explained that some of the big companies are having issues because of their size especially those who have branches in other African countries.
There is also the challenge of information technology, he said.
“For us, our challenge has to do with size. It is the first time we have to do a full blown financial result on IFRS.
“We are also faced with the problem of lack of good actuaries in the country. It is a bigger problem for us because as a composite insurance company that operates general and life businesses, we are required by the IFRS standard to produce two actuarial valuations for the two businesses. Before now, we were only required to do valuation for general business.
“The number of actuarial firms in the country is too small and it is a big challenge. Although the actuarial scientists in Nigeria are coming up with initiatives to develop that part of our business need, we are going to set up our own actuary in the company.“
An industry observer said it is worrisome that these companies have not submitted their account and had not got approval from the regulator.
He however urged NAICOM not to relent in enforcement of laws guiding the industry as this will bring out the true state of the industry and investors will be guided appropriately.
