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Tag: NAICOM

  • NAICOM to PenCom: let’s dialogue on Life Annuity fued

    NAICOM to PenCom: let’s dialogue on Life Annuity fued

    The National Insurance Commission (NAICOM) has sought to have a dialogue with the National Pension Commission (PenCom) following the latter’s suspension of Life Annuity (LA) insurance payments of retirees by Pension Fund Administrators (PFAs) to insurance companies.

    LA and Programme Withdrawal (PW) are modes of withdrawal of benefits over a lifespan. NAICOM and PenCom regulate the LA business of the Pension Reform Act (PRA) 2004 repealed by the PRA 2014.

    PenCom had directed insurance firms interested in administering annuity to pensioners to appoint Pension Fund Custodian (PFC) of their choice and open an account with them accordingly.

    This generated a backlash from insurers regulated by NAICOM as they disagreed with PenCom.

    A PFA who does not want its name mentioned said: “We are in receipt of a circular from PenCom requesting all annuity requests to be suspended until all the insurance companies interested in administering annuity to pensioners appoint PFC of their choice and open an account with them accordingly.

    “Consequently, no annuity request can obtain approval from PenCom for transfer until the above condition is met by the insurance companies.

    “In the meantime, we have initiated a process to reach the affected customers to sign a consent form authorising us to continue payment of their pensions as a temporary measure.”

    NAICOM has affirmed that it received a letter in this regard from PenCom.

    Its Head of Corporate Communications, Rasaaq Salami said the Commission was intervening on the matter and had called for a meeting with PenCom.

    “PenCom has sent us a letter on its suspension of annuity payment by PFAs to insurance companies. We have responded and stated our position and we have asked for a meeting with them.

    “Since the meeting is a process that we have initiated, it will not be good for us to make our position known to the public. The annuity business is jointly regulated by NAICOM and PenCom and we must look for how to resolve whatever problem we encounter,” he said.

  • NAICOM sacks ‘fake directors’ from firms

    NAICOM sacks ‘fake directors’ from firms

    •Recovers N66m looted cash

    The regulatory order placed on Goldlink Insurance Plc and International Energy Insurance (IEI) and others by the National Insurance Commission (NAICOM) is yielding results.

    The commission has booted out some directors from the companies.

    Similarly, the Commission claimed that a particular chairman returned N66 million cash looted from a risk bearing firm.

    Commissioner for Insurance, Mohammed Kari who spoke with reporters in Gombe, Gombe State, said parties that engaged in corrupt practices would be reported to anti-graft agencies for prosecution.

    He said shareholders who looted shares without paying for them had  been dragged to the Economic and Financial Crimes Commission (EFCC).

    He alleged that at Goldlink Insurance, some shareholders acquired claims without paying, adding that genuine shareholders of the companies have been identified.

    He said: “There are two types of interventions. These are direct intervention and regulatory orders; the regulatory order of these companies is based on restrictions on their spending limit. We don’t involve ourselves in managing the companies. We ensure that they refer whatever they are spending to the commission for approval.

    “In most cases, the technical issues like claims, reinsurance are not part of the issues they refer to us for approval and so technical order should not be a reason why any company will say our intervention is a problem to their operations. In the first place, a company falls under regulatory order because it is found to have violated significant issues of the regulation. Most of them have internal squabbles like corporate governance, financial or solvency margin issues and inability to pay claims.

    “Some of the companies are under direct order where the commissioner set up an interim management to look into the problems of the company. There was an internal squabble within IEI and the board of directors resigned from the board because of this problem. We set up an interim management which was empowered to conduct a forensic review and investigation into these companies.

    “The forensic review has done so many things that normal return inspection will not be able to identify. In the process of investigation, we also found that some of the shareholders of these companies were just shareholders by name. In the case of Goldlink, most of the shareholders acquired claims without paying for them. “Our position is that if you acquire share without paying for them, you must relinquish the shares voluntarily. So, if we did not do a share audit, we would not be able to determine the real shareholders. You will not be able to know that most of these so-called directors are just sitting there as majority shareholder and they are not paying for them.

    “We have collaborated with other regulatory bodies like Securities and Exchange Commission (SEC) because most of these issues are corporate governance issues, relating to the ownership of these companies.

    “We relate with them to have meetings and engagement to find a way to cover for the unpaid shares where it is possible and also refer some of these cases to relevant law enforcement agencies to ensure that the issues are properly addressed.”

    On whether or not the Commission will bail out the embattled companies like it was done with banks by the Asset Management Company of Nigeria (AMCON) and the Central Bank of Nigeria (CBN), the Commissioner said NAICOM cannot bail companies out under insurance arrangement.

    “Our law does not empower us to do that. Even the bailout, we always look at how we make these companies to bail themselves out because before you talk about bailout, the company must be able to bail itself out. In doing that, all the process of recovery of stolen funds must be returned. We have seen the problem of bailout where AMCON is trying to recover all these monies. Nigerian economy should not be used to fund financial recklessness of some people,” he added.

  • NAICOM canvasses compulsory insurance in Gombe

    NAICOM canvasses compulsory insurance in Gombe

    The National Insurance Commission (NAICOM) is enforcing compulsory insurance products in Gombe State.

    Commissioner for Insurance, Mohammed Kari, stated this during a  visit to Gombe State Governor, Alhaji Ibrahim Hassan Dankwambo, at the Government House in Gombe.

    He said the objective of the visit was to seek the support of the Governor for the implementation of compulsory insurance products in the state.

    He said the commission was not unmindful of the fact that the laws establishing these products are federal laws, but that they can easily be domesticated by the states and enforced within their boundaries.

    He appealed to the governnor to kick off the process of domesticating the laws if it had not already done so, especially for buildings under construction and public building insurances for easy enforcement.

    He said while the collaboration would result in increased insurance penetration and written premium income for the insurance industry, it would also create another veritable source of Internally Generated Revenue (IGR) for the government.

    He said: “It is our intention to establish a mutually beneficial relationship with the state. Our proposed collaboration will hopefully stem the proliferation of fake insurances in the state and ensure the people enjoy the benefits inherent in the consumption of genuine insurance products.

    “Another disturbing issue is that of apathy to insurance by the government and its agencies at all levels. We have discovered that most government fails to insure their assets and property even when funds are provided in the budget for it. This has become something of great concern to us in NAICOM and I want to use this medium to solicit the support and understanding of the governor in ensuring that the government of Gombe provides adequate insurance for its assets and property.’’

    “We have indeed established a dedicated committee in NAICOM to assist various governments in insuring their assets and property accordingly. This committee will be ready to work with your people once we receive your nod.”

    He disclosed that the insurance sector in Nigeria has under gone many reforms which have significantly changed the face of insurance in the country. The reform efforts have also attracted significant Foreign Direct Investment in the sector.

    He stressed that as at today, no fewer than 10 companies have one form of foreign investment or the other with many more still waiting to come in which has brought about efficiency, prompt payment of claims and most importantly, healthy competition amongst operators.

    With an estimated population of over 170 million people and given the present level of insurance penetration in Nigeria, the potential of the market is yet to be fully explored, he noted.

  • NAICOM relocates Inspectorate Directorate to Lagos

    NAICOM relocates Inspectorate Directorate to Lagos

    The National Insurance Commission (NAICOM) has relocated its Inspectorate Directorate from the head office in Abuja to the Lagos Control office for better service delivery to stakeholders.
    This was made known in a press statement yesterday made available to journalists by Head, Corporate Affairs, Rasaaq Salami in Lagos.
    Salami stated that the relocation is part of an ongoing restructuring exercise aimed at improving efficiency of the workforce and bringing the Commission closer to the regulated entities for effective insurance industry supervision.
    He said: “For the records, the Directorate is saddled with the responsibility of conducting on-site inspection of insurance entities for the Commission. It is imperative to note that over 90 per cent of insurance operators are headquartered in Lagos being the hub of commercial and economic activities in the country.
    “Thus, this exercise will ensure prompt and regular inspection of these insurance firms which include Insurance Companies and Brokers. The industry operators are enjoined to take advantage of this proximity to the Inspectors to enjoy quicker and efficient service delivery from the Regulator”, he added.

  • Shake up at NAICOM swaps Directorates heads

    The National Insurance Commission (NAICOM) yesterday announced the redeployment of some Directors to new portfolios and swapping of Heads of Directorate.

    A statement endorsed by its Head, Corporate Affairs Rasaaq Sala, explained explained that AlhajiAdamu Balanti who was hitherto the Director in charge of the Research, Statistics and Information Technology Directorate now moves to the Administration and Human Resources Directorate, while Mr. Amos Michael Habila who was in charge of Administration and Human Resources is now the Director of Research and Statistics.

    “In the same vein, Mr. Nicholas Opara who until date was the Director of Supervision now moves to the Finance and Accounts Directorate to replace the erstwhile Director, Mr. Olufemi Oluniyi Oba who has also been redeployed to oversee the Supervision Directorate.

    ‘The Directors have been enjoined to remain focused and dedicated to the mandate of the Commission as they settled into their new roles,” the statement added.

  • ‘NAICOM’s policies refining industry operations’

    ‘NAICOM’s policies refining industry operations’

    Industry operators have said the radical policies introduced by the National Insurance Commission (NAICOM) have improved their operations.

    Former President, Nigerian Council of Registered Insurance Brokers (NCRIB), Babatunde Olatunde-Agbeja, at a briefing in Lagos, said NAICOM was doing a good job.

    Olatunde-Agbeja, also the Chief Executive Officer, Boff & Company Insurance Brokers, said he had since ensured that his company observed a zero tolerance for non-compliance with NAICOM regulations.

    Mutual Benefits Chairman, Akin Ogunbiyi, said the degree of regulation of the industry was high.

    According to him, the commission introduced new guidelines, which included Market Conduct and Business Practice Guidelines and the Prudential Guidelines aimed at repositioning the Industry, boosting insured’s confidence and maintaining financial stability of the players in the industry alongside codes of corporate governance issued by various regulators.

    Ogunbiyi said increased regulation was an inescapable reality for the industry, adding that  it made sense to engage with regulators constructively.

    He said: “Our priority is to be at the fore front, and treat regulatory change as a way of increasing competitive advantage and creating new values. In addition, the new Commissioner for Insurance, Mohammed Kari inaugurated the Insurers’ Committee, which comprises all the chief executive of insurance companies in Nigeria and creates a platform to regularly meet with the Commission on the issues and challenges facing the industry.

    “For us at Mutual benefit, we are poised to deepen market penetration and customer acquisition; embed customer and service delivery excellence; transform people and culture; and drive operational effectiveness.”

    Royal Exchange Assurance PLC  Chairman, Kenneth Ezeanwani Odogwu said NAICOM had focused on a number of reforms in the industry.

    He said they included amongst others, Risk-Based Solvency (RBS), Supervision; Code of Corporate Governance Enforcement; Market Conduct and claims settlement reforms.

    “The apex regulator has also pushed for a 10-year tenure limit regulation for chief executive officers (CEOs) in its drive to engender good corporate governance in the industry.

    “Policy guidelines barring insurance companies from investing in businesses abroad and in their parent’s companies were also introduced. According to the policy, insurers are now excluded from investing in derivatives except in cases where approval is sought from the commission.

    “In addition, 20 of total current account balances and bank placements now represents the maximum acceptable placement for operators with any particular bank. Likewise, insurers are restricted from investing in companies that have neither reported profits nor paid dividend in the last three years.

    “NAICOM ordered operators not to outsource their investment functions without prior approval from the commission as well,” he said.

  • NAICOM to insurers: provide financial status before recapitalisation

    NAICOM to insurers: provide financial status before recapitalisation

    The National Insurance Commission (NAICOM) has asked the 59 insurance firms in the country to report the capital needs of their businesses in a financial condition report in preparation for recapitalisation.

    The commission said it was necessary to determine regulatory capital that would be appropriate for the firms, which comprises Life, Non-Life and Composite, to hold sufficient capital to cover their risk and liabilities when they arise.

    Commissioner for Insurance, Mohammed Kari, in an interaction with reporters in Lagos said the commission expects the report from the firms while it prepares a guideline that would be released in due course.

    Kari said since the Minister of Finance, Mrs. Kemi Adeosun, made a statement at the last Insurance Industry Consultative Conference ( IICC), the Commission has been inundated with requests to clarify what she meant by her statement which read “would need to recapitalise.”

    He said: “But I ask, what is there to clarify? However, there is nothing to panic about. It is the expectation of any business to have adequate capital to meet its liabilities.

    “This is more so in insurance business that has a time frame for companies to settle their claims. We have quite a number of companies that have either eroded capital base or have miss-matched their assets or liabilities cover, mostly arising from wrong investment decisions. Our concern is for the firms to hold sufficient capital to cover their risks and liabilities when they arise at all times. This is very crucial in turbulent times like the ones we are currently going through.

    “While we are going to develop a full risk based capital framework, we will be expecting companies to initiate the appropriate capital adequacy reviews and have their actuary report the capital needs of their business in a financial condition report.

    “A guideline would be released in due course. It is important for all insurers and reinsurers to get used to voluntarily holding capital that would protect policy holders against adverse outcomes that could negatively affect their ability to meet their obligations. Those in the annuity business can easily relate to this statement because of their experience in 2015.”

  • CBN, NAICOM disagree on bancassurance

    CBN, NAICOM disagree on bancassurance

    The Central Bank of Nigeria (CBN) and the National Insurance Commission (NAICOM) have disagreed on terms and conditions for the operation of bancassurance for the banking and insurance industry.

    As a result, NAICOM has directed all insurance companies to stop transacting business on bancassurance where they pay Commission/fees to Banks for Insurance transactions, referral or introduction in any guise with the banks.

    Th Commissioner for Insurance, Mohammed Kari made this known while speaking at the Insurance Distribution Channels at the investiture of Eddie Efekoha,  as the 22nd Chairman of the Nigeria Insurers Assocaition (NIA), held yesterday at Eko Hotels & Suites, Victoria Island, Lagos.

    Kari warned that insurance companies utilising, or intending to utilise any institution, including banks, airlines, online or web-based aggregators shall ensure that those institutions have been licensed by the Commission, as they have resolved to ensure strict compliance with the rules, adding that   appropriate sanctions will be imposed on erring insurance institutions.

    He stated that the Commission is making all efforts to libralise the channels of distribution.

    He said: “This became necessary because distribution play a key role in the propagation and marketing of insurance products to the consumers. Licensing such channels is imperative to protecting the consumers and also to ensure  ethical and orderly practice  in  protecting the credibility of the insurance sector which is the principal mandate of the Commission.

    “However, the employment of such channels can only be utilised if that institution is licensed by the Commission in line with the provisions of the extant law. It is the licensing of those distribution channels that would authorise them to sell, distribute, refer or introduce insurance products through another licensed Insurance entity to their customers and earn a fee or commission.

    “As you aware, the Commission has been in discussion with the Central Bank on the Bancassurance distribution channel for sometime now. But in a letter received last week, the CBN asserted that NAICOM is not in a position to licence Banks and thus we cannot go ahead with the arrangement for now. However, NAICOM would continue to engage the CBN until all the grey areas are resolved, Kari said.

  • Group seeks intervention in NAICOM, union feud

    Group seeks intervention in NAICOM, union feud

    A professional group has called on financial regulators to intervene in the crisis between management of National Insurance Commission (NAICOM) and employees under the aegis of Amalgamated Union of Public Corporations, Civil Service Technical and Recreational Service Employees (AUPCTRE).

    The group, Committee of Concerned Finance Professionals, said the allegation of financial recklessness levelled against some officials, which degenerated into crisis, has not been resolved.

    A statement by its chairman Gabriel Anitekhi and secretary Yussuf Gindinrin said: “We have learnt that the battle between executive management of NAICOM and AUPCTRE is no longer smooth, as there is no mutual working cordiality among staff and members of the commission.

    “There are further  indications that this is unconnected to the failed attempt of the regulators to adhere strictly to the agreement as contained in the Memorandum of Understanding (MoU) signed by the warring factions after the March 22 protest in Abuja.

    “Instead, the management through the Director of Administration faulted the agreement in another circular to the union and members of staff.”

     

     

     

  • Naicom blocks International Energy Insurance’s asset sale

    The National Insurance Commission (Naicom) has directed the interim management of the International Energy Insurance (IEI) Plc to suspend the proposed sale of the company’s major equity stake in IEI Anchor Pensions Limited.

    The interim management had proposed to sell IEI’s investment in IEI Anchor Pensions Limited, citing the operational guideline of the Naicom that prohibits investment of greater than 25 per cent of proceeds from a private placement or public offer in a non-insurance asset.

    However, the Commission was said to have directed the interim management, which it appointed after sacking the previous management of IEI, to stand down the disposal process.

    Naicom had in 2015 intervened in the  governance  of  IEI and appointed an interim management board (IMB) effective May 18, 2015.The IMB is chaired by Mr Muhammad Ahmad, founding director general of National Pension Commission (Pencom) and it included Ms. Daisy Ekineh and Mrs. Bridget Akintola

    The management of IEI confirmed the suspension of the divestment process.

    IEI had struggled from one crisis to another and remained under the danger of compulsory delisting at the Nigerian Stock Exchange (NSE). IEI’s share price has fallen to its nominal value of 50 kobo, underlining the steep decline since its share restructuring in 2013. In 2013, IEI had restructured its previous outstanding shares of 6.42 billion ordinary shares of 50 kobo each to 1.284 billion ordinary shares of 50 kobo each. The post-consolidation shares were listed at N2.50 per share, making IEI the then highest-priced stock in the insurance sector.

    The Nation had reported that the national council of the NSE had approved delisting of 17 companies. A total of 18 companies have been slated for delisting including 17 companies that have been earmarked for compulsory delisting and a company that had opted for voluntary delisting over its inability to comply with listing requirements.

    The Nation’s check had indicated that the delisting will shave of more than N33 billion from the market capitalisation of the Exchange, implying direct loss of similar value to investors who may not be able to unlock such value in the absence of a regular stock exchange.

    With the recent delisting of eight companies, other companies currently on final delisting process included IEI, Navitus Energy Plc, formerly Union Ventures & Petroleum Plc; Costain (West Africa) Plc, Lennards (Nigeria) Plc, Deap Capital Management & Trust Plc, Evans Medical Plc, P.S Mandrides & Company Plc, Nigerian Ropes Plc and Premier Breweries Plc.