No fewer than 23 Nigerian insurance firms risk sanctions, which include but not limited to the suspension of their operating licences for non-rendition of accounts to regulators.
Mohammad Kari, Nigeria’s Federal Commissioner for Insurance, is said to have instructed the technical department of the commission to put the affected underwriting houses on notice on the account of failure to render returns for the business year ended December 31, 2016.
Insurance companies have March 31 deadline every year to submit their financial sheets for scrutiny and subsequent approval ahead of the presentation of such reports for shareholders’ approval at general meetings.
Businessamlive learnt Thursday that only 34 of 57 operating insurance companies in Nigeria have complied with the regulation on rendition of accounts.
Both the Nigerian Deposit Insurance Corporation (NDIC) and the Central Bank of Nigeria (CBN) are said to be waiting in the wings ahead of NAICOM’s clamp down on the offending firms.
Nigerian insurance firms, whose financial accounts were yet to be submitted before March 31, 2017, would be barred from engaging in further business activities, industry regulator, National Insurance Commission (NAICOM), has revealed.
As a prelude, NIACOM is said to be inching towards barring the 23 companies from undertaking fresh businesses, pending their compliance to extant laws.
Of this number, NAICOM informed that three are yet to respond to queries raised on their accounts just as five others are undergoing review.
NAICOM maintained that the decision to impose sanctions on such companies became necessary, as their default deprives the regulation, policyholders, insurance intermediaries, analysts and other stakeholders of the relevant information about their performance and financial conditions.
The insurance Act specifically imposes a daily fine of N5,000 on firms that failed to meet the March 31st deadline for the submission of their accounts.
“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,” NAICOM had ruled.
Insurance managers who reacted to the unfolding events in the market accuse the regulatory body of been insensitive to harsh operating environment as well as what they described as NAICOM’s unfriendly interpretation of operating guidelines.