The Nation Newspaper

Tag: NAICOM

  • Daniel slams erring firms over non-submission of 2012 accounts

    Daniel slams erring firms over non-submission of 2012 accounts

    COMMISSIONER for Insurance Mr. Fola Daniel has criticised insurance firms that failed to submit their annual reports eight months into 2013 financial year, warning that they were sending a wrong signal to the world about the health of the industry.

    The Commissioner spoke at the just-concluded seminar for insurance correspondents in Ilorin while commenting on the inability of companies to submit their International Financiaal Reporting Standard (IFRS).

    He, however, assured that in spite of this, the industry remained healthy adding that the National Insurance Commission (NAICOM) will ensure the security of the investment of the public.

    He said the commission has written letters to the chairmen of the companies that have not submitted the accounts and have asked them to dig into the competency of the management of their companies.

    According to him, the commission has no apologies for not approving the result of the insurance firms that have submitted, insisting that NAICOM was not ready to bend the rules.

    He said: “The commission will not compromise but will ensure that the companies abide by the rules and regulations. We have no apologies or excuses for not approving accounts that are not correct. We will rather delay clearance of accounts than allow such accounts to be passed.

    “The biggest problem that we have had in the past is accounts coming from the industry that are not trusted by investors. That is why they do forensics on accounts that have been passed by regulators. This is not a good thing for the companies, the industry and the nation.”

    The NAICOM boss pledged that under his leadership, the regulatory body will not allow the insuring public to be misled.

    He noted that the Nigerian Stock Exchange (NSE) and the Securities and Exchange Commission (SEC) agreed with the commission on the affected  companies.

    He added that the commission has done its best in educating the various companies and its external auditors on IFRS and will continue to make corrections until they get it right

    The Commissioner saidNAICOM will be focusing on deepening insurance penetration through Micro Insurance and Takaful Insurance.

    He explained that micro-insurance is not a conventional insurance that is expensive, adding is affordable and the reach of low income earners.

    On Takaful Insurance, he said it is different from the conventional insurance, adding that the concept is unique and it is accepted by both Christians and Muslims alike, adding that Takaful Insurance is based on trust, fairness and equity.

    He explained further that Takaful Insurance is not about Muslims as being misconcieved, but rather, a better way of doing insurance business that will benefit those at the grassroots.

    He said NAICOM will soon be joining the other regulatory bodies in the country to create awareness about financial illiteracy, adding that in the next few weeks, the commission will embark on outreach programmes to educate its constituency over the issue.

    On money laundering, he said tackling the menace would be on the agenda of the commission in next year.

  • ‘North Central vehicles not insured’

    ASSISTANT Director, National Insurance Commission (NAICOM), Lucky Fiakpa, yesterday said 99 per cent of commercial vehicles in the North Central zone are without insurance policies.

    Fiakpa spoke yesterday in Ilorin, the Kwara State capital, at a stakeholders’ forum on motor insurance.

    He added that most vehicle owners in the zone are sceptical and fear that insurance companies do not pay claims.

    The NAICOM boss said Nigerians do not like to pay insurance because they don’t know the benefits accruable in different insurance policies.

    He added that third party insurance policy transfers all risks in the event of accident to insurance companies while the vehicle owner is saved from loss or embarrassment.

    “When you pick genuine insurance policy, you can have access to prompt and effective medical attention, there will be succour to families of dead victims, and you have rest of mind because you have paid a token amount of money to an insurance company to take care of the risks.”

  • Claims: NAICOM resolves N500m complaints

    Sanctions 20 firms on AML, CFT

    About 193 cases involvingN500 million were resolved by the National Insurance Commission’s (NAICOM) Compliant Bureau in the 2011 financial year, The Nation has learnt.

    Also, in the review period, NAICOM and the NFIU penalised 20 Life and Composite insurance firms for non-compliance with staff training requirements of the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) provision, according to NAICOM’s Commissioner for Insurance, Mr Fola Daniel, in the 2011 annual report obtained by The Nation.

    The Complaint Bureau is saddled with receiving and processing complaints, which increased in the review period, NAICOM, said.

    Accoding to the Daniel, the increase in the number of complaints is as a result of the various publicity campaigns that the Commission embarked upon, resulting in increased awareness by the public on the role NAICOM plays in the insurance sector.

    “The Complaints Bureau received a total of 345 complaints, which is more than the number received in 2010, or the year before it. Responses have been obtained from some underwriters, while some are yet to respond despite the two weeks deadline whichin which they were expected to respond. Reminder letters were sent to the affected companies,” he added.

    Daniel explained that the complaints received were mainly on non-settlement of claims on third party insurance, marine, life, bonds and pensions, noting that the complaints were received from policy holders, their representatives, beneficiaries, government agencies, SERVICOM and the Public Complaints Commission, as well as the Economic and Financial Crimes Commission (EFCC), among others.

    He stated that the commission early in 2011 set up the AML/CFT Unit to address complaints.

    “During the same period, the commission issued the industry AML/CFT guidelines and in December 2011, the guidelines were revised to meet requirements of the Financial Action Task Force (FATF). The unit organised a total of three industry workshops, two of which were for Compliance Officers and Internal Auditors, and one for Directors and Executive Management.

     

     

     

     

     

    “Jointly with NFIU, the unit carried out on-site AML/CFT inspection of 20 life and composite insurance companies. Virtually all the companies inspected were penalised for non-compliance with staff training requirements of the AML/CFT guidelines. The impact of the inspection exercise has been very positive as the level of AML/CFT awareness in the institutions has been growing steadily,” he said.

    Daniel said the unit collaborated with OSCAR, an arm of SERVICOM charged with the responsibility of securing compensation for road accident victims, adding that during the review period, six applications were received in respect of claims under hit and run road accident victims, and all the applicants were paid.

    He said the unit also supervised the intervention of Investment and Allied Assurance Company, while the Commission approved 10 sets of merging companies and four sets of acquiring companies.

  • Mutual Benefit, others fail to submit report

    Mutual Benefit, others fail to submit report

    As the days continue to race against insurance and re-insurance firms to get their 2012 International Financial Reporting Standard (IFRS) audited accounts approved by the National Insurance Commission (NAICOM), 18 companies, including Industrial and General Insurance Plc, Mutual Benefit Assurance Limited and Goldlink Insurance Plc, are yet to submit their accounts 10 months into this financial year.

    According to Section 26 of Insurance Act, 2003, these companies risk cancellation of their operating licence.

    Section 26 states that failure to file yearly returns constitutes a ground for cancellation of their operating and an insurer shall be deemed to have failed to file its annual returns if the provisions of the section are not met 12 months after the end of the financial year.

    This was revealed by the NAICOM, the regulatory authority in its recent Submission Status of 2012 Financial Statements of Insurance Companies.

    According to the NAICOM, out of the 60 insurance and reinsurance companies, only 18 are yet to submit the account, 22 have gotten approval of the accounts while 20 have submitted and awaiting responses or been queried at different levels.

    A study of the status report showed that three major composite insurers, Industrial and General Insurance Plc, Goldlink Insurance Plc, NICON Insurance Plc are yet to submit.

  • Insurers pay N81.3m fines, penalties to NAICOM

    •Commission generates N1.97b 

    Insurance operators in the country paid N81.3 million as fines and penalties during the year ended December 31, 2011to the regulatory authority, the National Insurance Commission (NAICOM)as against N70.3 million paid in 2010.

    This was revealed in the NAICOM 2011 yearly report obtained by The Nation.

    Total insurance levies paid by operators, including insurers, brokers and loss adjusters in the year under review amounts to N1.57 billion as against N1.4 billion recorded in the preceding year.

    With a staff of 143,117, NAICOM generated an income of N1.97 billion as against N1.6 billion the previous year and recorded a surplus of N624 million.

    Under its operating income, it got Federal Government’s subvention of N582 million, registration and renewal fees of N104 million and attestation fees of N310 million.

    NAICOM, however, spent N1.3 billion out of which it donated N2.33million during the year.

    Out of the donations, the commission gave N1 million to Nigeria Youth for Goodluck Jonathan, N1 million to fire disaster prevention & safety, N300,000 to Nungtso Charity Foundation and N30,000 to West African Insurance Institute.

    Speaking on the industry in the year under review, Commissioner for Insurance, Mr Fola Daniel said the insurance sub-sector underwent substantial structural and regulatory reforms three years ago.

    Daniel hinted that the medium term reform plan of the Market Development and Restructuring Initiative (MDRI), the a new Strategic Plan Document and the introduction of micro insurance and Takaful insurance models were possible inclusion in the commission’s plans.

    The two insurance models like the MDRI scheme, are focused on addressing issues of low insurance uptake, financial and social inclusion, lack of insurance awareness, market deepening and insurance penetration in the country.

    On the nation’s economic outlook, Daniel said overall economic performance last year was likely to increase, but at a slower pace.

    He said: “In 2012 specifically, the growth rate of real GDP is expected to fall, inflationary.

    “Pressures are likely to be higher, while value of total trade is forecast to decline. This is attributable to increased insecurity and general financial industry reforms still ongoing. The overall growth for the year is expected to be affected by the economic loss from the nation-wide strike early in the year; the partial removal of fuel subsidy will feed into the overall price level to contribute to the inflationary pressures in the economy.

    “However, the mounting interest in Takaful and micro-insurance models schemes coupled with appropriate country-wide diagnostic research study will lead to the implementation of a social benefits programme through insurance with resultant effects of higher insurance awareness, market deepening and increase in insurance penetration. The outcome will therefore be increased investments and improved standard of living with a growing economy.”

    Furthermore, the commissioner said NAICOM has taken steps aimed at ensuring stricter compliance with existing laws and created additional operational guidelines to strengthen supervision in the industry.

    These he stressed include new regulations on premium receivables, solvency margins, and guidelines for the oil and gas insurance.

    “The Commission is moving to (bridge) any existing gaps in the regulation of insurer’s solvency status, in addition to remission of premiums by brokers. More so, the Commission has set out to introduce the new accounting administration for the industry.

    “The International Financial Reporting Standard (IFRS) is to replace the old practice of financial reporting in the insurance industry and NAICOM is championing its course through various stakeholders’ engagements, awareness and education,” he added.

    Accoring to him, NAICOM is also spearheading the anti-money laundering campaigns within the industry in collaboration with other related agencies to prevent fraudulent practices and detect them if any. Insurers’ are advised to undertake due diligence ontheir clients, he said.

    Daniel said the commission was at the fore-front of advocacy for the Local Content Act, adding that the law held significant potential for the growth of the insurance industry.

    He noted that the law places responsibility on foreign oil companies to retain a substantial portion of their operations in the local economy adding that aside from addressing capital flight, it provides indigenous insurers with an appreciable level of exposure to complex oil and gas risk underwriting deals that could rub off positively on human capital development and underwriting expertise in the industry.

    “Under the regulation, no insurance risk in the Nigerian oil & gas industry should be placed overseas without the written approval of the Commission which will ensure that Nigerian local capacity has been fully exhausted. The law aims to retain up to 70.0 per cent of oil and gas risks in the local insurance markets.

    “Following the release of Oil and Gas Guidelines, the Directorate inspected 31 insurance companies on April 6 to 19, 2011 to ascertain compliance with the statedguidelines. The reports of the inspection were reviewed and proper sanctions were meted to defaulting companies,” he said.

  • Insurers record high cash flow, says NAICOM

    Commissioner for Insurance, National Insurance Comission (NAICOM), Mr. Fola Daniel has revealed that the on-going implementation of the ‘No premium, no cover’ law which started on January 1, this year has significantly improved the cash flow of insurance institutions in the country.

    The NAICOM boss gave this hint at thesensitisation workshop for stakeholders, in new Karu, Nasarawa State. A channel he said is expected to raise public awareness on the key initiatives of the commission aimed at further opening up the market, and by extension increasing the sector’s contributions to the Gross Domestic Product (GDP) of the nation.

    He said it is expected that this positive turn of events would impact on the capacity of operators to settle claims promptly, thus removing a major sore point in the relationship of insurance consumers and service providers.

    Daniel stressed that the commission had to implement the law on ‘No premium, no cover’ law in order to put a stop to the vexed issue of delayed or non-payment of insurance premium by the insured.

    Section 50 (1) of the Insurance Act 2003 stipulates that the receipt of an insurance premium shall be a condition precedent to a valid contract of insurance and there shall be no cover in respect of an insurance risk unless the premium is paid in advance.

    He explained that invariably, it presupposes that no insurance cover shall be granted by any insurance company without having received the premium.

    Daniel said the insurance sector has great potentials for massive growth.

    “You will agree with me that the population and size of the country, if adequately harnessed, give an added advantage to the insurance industry to further develop its market,” he said.

    He noted that the various initiatives put in place by the Commission in recent times were all geared towards turning round the fortunes of the sector.

    He said to ensure adequate understanding and build capacity among the stakeholders, NAICOM has resolved to conduct a series of workshops and seminars for stakeholders adding that the sensitisation programme in Nasarawa was among the workshops and seminars earmarked to inform and educate stakeholders towards the attainment of mutually beneficial relationship between organisations.

    “The insurance industry has witnessed tremendous changes in recent times owing to the new reforms embarked upon by NAICOM.

    “These reforms include the introduction of Risk Based Supervision, migration to International Financial Reporting Standard (IFRS) from the Nigerian Generally Accepted Accounting Principles (NGAAP); Market Conduct Reforms, Claims Settlement Reforms, Financial Inclusion and others, all geared towards developing the industry and improving the general perception about insurance.”

    According to him, these reforms were in line with government’s Vision 20:2020 of deepening insurance penetration to become the insurance industry of choice among the emerging markets in terms of capacity, safety, transparency and efficiency.

  • NAICOM promises to release report on Goldlink soon

    The National Insurance Commission (NAICOM) has pledged to act soon on the recommendations of the report of the interim management it set up to probe sacked directors of Goldlink Insurance Plc, The Nation learnt.

    They were booted out for alleged anomalies and misstatements in the company’s accounts for the year ended December 31, 2011.

    Spokesman, Rasaaq Salami, confirmed NAICOM’s receiving of the report, adding that it was received about three weeks ago.

    He said the interim management has reviewed the audit by KPMG, and made recommendations, adding that the Commission is working on these recommendations.

    Salami regreted that NAICOM’s intervention came a little late. The former board alleged to be involved in mismanagement and other irregularities had Mr Gbenga Afolayan as Chairman, and Mr Femi Okuniyi as Managing Director.

    The interim board has Mr James Ayo as Chairman; Mr Gbolahan Olutayo, as Managing Director and Mr Adeyinka Olutungasem, Chief Finance Officer.

    Other members include Ambassador Umar Damagun, Alhaji Sahe Dabana, Prof. Chioma Kanu Agomo and Mallam Abubakar Sadiq Mijinyawa.

    But the interim management constituted to audit the financial reports and corporate governance failures, is still in office three weeks after the submission of their findings, despite shareholders’ grouse over the huge funds being spent on them.

    However, Salami said the interim management team was being retained to avoid a gap.

    Meanwhile, sources in the industry who asked not to be identified, said they were worried over the delay by NAICOM to unveil the findings of the KPMG report.

    One of the sources pointed out that there should be no more excuses from the regulator since the recommendation has been submitted to them.

    Another source urged NAICOM to release the findings soon.

    NAICOM had in furtherance of its oversight functions taken over the management of Goldlink Insurance Plc and constituted a seven-man interim board to oversee the affairs of the company for six months with effect from October last year.

    According to the commission, the interim board followed the resignation of members of the directors of the company. Their resignation became apparent after the commission uncovered anomalies and misstatements in the audited financial statements of the company for the year ended December 31, 2011.

    The board was charged with probing the financial reports and corporate governance failures observed in the company’s financial statement for 2011.

  • NAICOM seeks legislation to end building collapse

    NAICOM seeks legislation to end building collapse

    •Erring landlords risk jail 

    The National Insurance Commission (NAICOM) has called on state governments to enact a legislation to ensure buildings used by third parties within their states are adequately insured.

    NAICOM Commissioner for Insurance, Mr Fola Daniel, disclosed this in a statement made available to The Nation. He, however, sympathised with victims and family members of those who lost their lives in collapsed buildings.

    He advised members of the public to comply with the Insurance Act 2003, which made it compulsory for buildings used by third parties to be insured against the risks of collapse, fire, earthquakes, storm or flood.

    He reminded the public that non-compliance with this provision of the law attracts a penalty of N100,000 or one year imprisonment or both.

    According to him, this has become necessary in other to give relief to victims of collapsed buildings whenever they occur.

    He noted that in Lagos alone, it was reported that well over 20 lives had been lost to building collapse in the last six months.

    Daniel said, “NAICOM deeply sympathises with victims and family members of those that lost their lives in the recent collapsed buildings in Lagos and Kaduna States. In Lagos alone, it is reported that well over 20 lives have been lost to building collapse in the last six months.

    “Most painful is the fact that majority of those injured have to bear the treatment costs themselves while the families of those that lost their bread winners have no form of compensation, except maybe, the little that the state government could provide from the scarce resources of the state. The Commission is sad with this avoidable burden on government and victims if only these buildings are adequately insured.

    “The Federal Government, through the Insurance Act 2003, made it compulsory for all buildings used by third parties to be insured against the risks of collapse, fire, earthquakes, storm or flood such that in the event of any of these risks crystalising, adequate compensation would be paid to both victims and families of those who may lose their lives.

    “Members of the public are hereby reminded that non-compliance with this provision of the law attracts a penalty of N100,000 or one year imprisonment or both.”

    He said the Commission equally seizes this opportunity to urge all state governments to push or the enactment of a law to ensure that buildings used by third parties in their states are insured to give relief to victims of collapsed buildings.

    “Let us all give hope to victims and family members of those who lose their bread winners in collapsed building incidences across the country,” he added.

    Insurance of public buildings is one of the major components of compulsory insurance in Nigeria in 2007. They were introduced by NAICOM through its Market Development Initiative programme and made compulsory by the Insurance Act 2003 and other sister legislations.

    Several collapsed buildings in the country have left scores of people injured or dead without any compensation because they were not covered by an insurance policy.

    Recently, tragedy struck in Lagos as a three-storey building collapsed in Ebute Meta, killing seven people and injuring many others.

    Also, in Kaduna State, another three-storey building collapsed in the Kaduna metropolis with many people reported trapped.

     

     

     

     

  • 95% insurers yet to comply with IFRS requirement

    95% insurers yet to comply with IFRS requirement

    •Oasis gets NAICOM’s approval

    Underwriting firms are in a race to meet up with the requirement by regulatory authority, the National Insurance Commission’s (NAICOM’s) on the 2012 International Financial Reporting Standard (IFRS) account.

    Oasis Insurance Plc has, however, joined the league of firms that have passed their 2012 IFRS test, two weeks after the June 30 deadline.

    The Nation learnt that out of 59 insurance firms, 54 are yet to pass the test. Out of these, 16 have submitted their accounts but have not got approval, while 38 are yet to submit their account to the regulator.

    According to NAICOM spokesman, Rasaaq Salami, as at July 1, only Mansad Insurance, Adic Insurance, Consolidated Hallmark Insurance and Wapic Insurance Plc, have been able to get approval on their financial accounts which are IFRS compliant. Oasis made the league recently.

    Salami explained that the accounts of First Bank Life Assurance, Continental Reinsurance Company Plc and Law Union and Rock Insurance, were queried, saying their responses are being awaited.

    He said accounts of AIICO Insurance, UBA Metropolitan Life, Custodian and Allied, NEM, Crusader General, Crusader Life, Zenith General, Zenith Life, FIN Insurance and Standard Alliance Life, are being reviewed.

    On the development, Managing Director, Consolidated Hallmark Insurance Plc, Eddie Efekoha, said NAICOM approval of its IFRS 2012 account was a positive development, attributing it to the determination of the management, Board of Directors and the entire staff of the company

    He said the transition to the IFRS reporting was not as seamless as envisaged in the industry, noting that subsequent years would be less problematic for the players because of lessons learnt.

    He added that the company remained committed towards ensuring that compliance issues with all regulators, both industry based and capital market, would be continually adhered to.

    The Commissioner for Insurance, Fola Daniel, warned that the regulatory body would not approve any account that fails to meet the required standard.

    He assured that the commission will maintain strict reporting standard in the financials of insurance firms, adding that the inability of the operators to meet the set deadline for accounts’ submission would attract sanction of N5000 per day, in accordance with the provision in the Insurance Act.

  • Shareholders to NAICOM: Be decisive on Goldlink

    SHAREHOLDERS of Goldline Insurance Plc have expressed doubt over the sincerity of the regulator, the National Insurance Commission (NAICOM), in exposing the forensic report of KPMG over the true financial position of the risk bearing firm.

    In line with its regulatory oversight function, NAICOM had taken over the management of Goldlink Insurance Plc, one of the composite insurance companies in the country.

    The takeover is similar to what happened in the banking sector in 2009 when the Central Bank Governor, Sanusi Lamido Sanusi, wielded the big stick against some erring chief executive officers of banks in the country.

    NAICOM has in the past six years taken over Spring Life Insurance and Investment and Allied Assurance Plc. Goldlink is the third insurance company to be taken over by the commission.

    Following the resignation of the former board in November 2012, NAICOM, headed by Commissioner for Insurance, Mr. Fola Daniel, reconstituted an interim board comprising the chairman, Mr. James Ayo and Mr. Gbolahan Olutayo as Managing Director.

    The former board had Mr. Gbenga Afolayan as Chairman and Mr. Femi Okuniyi as the managing director of the company.

    They were forced to resign over alleged misstatements of the company for the year ended December 31, 2011.

    Daniel said the interim board is charged with the responsibility of carrying out full investigation on the financial reports and corporate governance failures observed in the course of reviewing the company’s financial statement for the year 2011.

    It was however gathered that NAICOM had received the forensic report of Goldlink Insurance Plc.

    It was also gathered that the regulator had also secretely extended the tenure of the interim board members which expired in April to end of July this year.

    Shareholders and sources in the insurance industry who spoke with The Nation over the company’s takeover said they want NAICOM to take a bold step on the company and reveal the findings of the report.

    They want to know if money has been stolen from the company and the financial status of the company.

    According to them, there is a lot of pressure on the commissioner not to disclose some of the findings of the report, adding that the further extension of the interim board may be part of the pressure mounted on him not to disclose the findings of the forensic report.

    A source who does not want his name mentioned disclosed that the KPMG’s forensic report contained damning revelations.

    Another source who spoke advised the regulator to be decisive about the way the intervention should go and not bow to any pressure if the ultimate goal of the takeover is survival of the company.

    He noted that NAICOM should be more sincere with its supervisory roles as the problem in Goldlink did not start in 2011.

    Chairman of Standard Shareholders Association of Nigeria, Mr. Anono Godwin, said his members were not happy with timing of NAICOM’s takeover of the company, lamenting that efforts were underway to get funds to return the company back to profitability before the regulator swung into action.

    He said, “The regulator is only interested in slamming fines and penalties on these companies. The shareholders already gave the company the mandate to get a loan from the bank either on short or long term to get the company going.

    “But they went ahead and intervened. Now that they have intervened, how long will it take them to let us know what is happening in the company? But we will wait for them till the end of the three months extension which ends this month before we know what step to take.”

    A shareholder said NAICOM ought to let them know what the achievement of the interim board is in the first six months of their investigation before extending their tenure for another three months.

    The shareholder said his members would also like to know the financial cost of the intervention on the firm.

    “If the commission had been carrying out its oversight functions properly, it would not have waited until things got bad before reacting. “It was the same problem with Spring Life and Investment and Allied Assurance,”the shareholder said.

    Responding to an email enquiry on its intervention in Goldlink, the Commissioner confirmed that the commission has received a forensic report from KPMG on alledged misstatements in the company’s 2011 account.

    Stating reasons for the extension, Daniel had explained that it was in order to allow for the conclusion of the forensic audit which was still in process then.

    Daniel said: “Yes, a copy of the report was forwarded to the Commission just by way of information only. But it is the responsibility of the interim management of the company to submit the report to NAICOM, stating its observations, comments and advice.

    “The Commission awaits the report of the interim management, which is being expected soon and wouldn’t want to inadvertently pre-empt or influence their report.”

    When The Nation contacted the Chairman of the Interim Board, Mr. James Ayo, over some of the questions raised by the shareholders, he said the board members have decided not to speak with journalist and advised that all questions be directed to the regulator as the board members were its agents.