By David Adelowokan
TWENTY-one insurance firms have been sanctioned by the Nigerian Stock Exchange (NSE) for failing to submit their 2012 accounts as statutorily required, Morning Mail has learnt.
For the 2013, brokers hoping for a waiver for the submission of their 2013 financial accounts from the National Insurance Commission (NAICOM) have also been told to perish the thought.
NAICOM will also not intervene in the sanction of such companies that are listed on the NSE.
The submission of the 2013 account is a condition for the training of the companies’ officials on International Financial Reporting Standards (IFRS).
The Nigerian Council of Registered Insurance Brokers (NCRIB) had recently claimed that the regulator had waived the submission of the account to be trained on the Financial Reporting Council (FRC) requirement.
However, the Commissioner for Insurance, Mr. Fola Daniel, told Morning Mail in Lagos at the weekend that the Commission did not have the statutory power to grant such waiver.
NCRIB’s Executive Secretary, Fatai Adegbenro, had made the claim during a recent meeting with the Lagos Area Committee members of the association.
Morning Mail learnt that the over 500 brokers in the country were levied N100, 000.00 (One Hundred Thousand Naira) each to engage the service of a consultant that will train all accountants and auditors of each broking firm for two days.
Adegbenro had told the members that the council had an agreement with NAICOM to train the council members on the IFRS to avoid the replication of what had been happening to many underwriters who failed to meet the requirement of the Financial Reporting Council (FRC) last year.
To date, many are still battling with their 2012 accounts.
He also explained that after consultations, NAICOM agreed to engage the consultant that would train the accountants and auditors.
“If it has to do with individual training, a broker will be paying N1.5 million and we considered how it will be more convenient for our members. That was why we accepted the N100, 000 per broker,” Adegbenro said.
But Daniel refuted the claim. He told Morning Mail: “I don’t know where that is coming from. We didn’t waive anything. Basically, what we said was that for the purpose of migration to IFRS, we will not delay issuance of their licences. Rather, we will rely on their 2012 submitted accounts. We cannot waive submission of account because it is statutory and we don’t have the power.”
He stated flatly: “NAICOM did not waive submission of brokers’ 2013 account for any reason.”
On the N60 million penalties paid by the 21 listed insurance companies to the Nigerian Stock Exchange (NSE) for late submission of their 2012 financial accounts, Daniel said that the fault was not from NAICOM and that whoever flouts NSE’s rules should be ready to face the consequences.
The X-Compliant Report dated April 25, 2014 on the NSE website, imposes a penalty of N4.2 million on Universal Insurance Plc, while African Alliance Insurance Plc equally paid N4 million and Guinea Insurance Plc paid N3.8 million.
Other fines imposed by the Exchange include Equity Assurance Plc and Niger Insurance Plc (N3.2 million each), Great Nigerian Insurance Plc (N3.8 million), Staco Insurance Plc (N3.5 million) and Lasaco Assurance Plc (N3.6 million).
The list also includes: NEM Insurance Plc (N3.5 million), Mutual Benefit Assurance Plc (N3.4 million), Prestige Assurance (N2.9 million), Law Union and Rock Insurance Plc (N2.7 million), Regency Alliance Insurance Plc (N2.5 million), Sovereign Trust Insurance (STI) Plc (N2.4 million), Cornerstone Insurance Plc (N2.8 million) and Royal Exchange Plc (N2.6 million).
The rest are Unity Kapital Insurance Plc (N2.1 million), Custodian & Allied Insurance Plc (N2.2 million), AIICO Insurance Plc (for N1.5 million), Consolidated Hallmark Insurance Plc (N900, 000) and Wapic Insurance Plc (N700, 000).
The Commissioner said: “For all listed companies, the requirement is that they must submit their accounts not later than 31st of March and for the commission, our own requirement is that they must submit their accounts not later than 30th of June. But when there are two conflicting rules, the principle is that you take the stricter principle in which case, all listed companies for the purposes of compliance must submit their accounts by 31st of March to the Stock Exchange and when they know the implication and they don’t do it, then, they should be ready to face the consequences.”
Daniel said further: “For anyone that is not compliant, they face the consequence of non-compliance alone, we cannot give subsidy for complacency.”
On the ‘No premium, No cover’ policy of the Commission, Daniel lauded the operators and said that the policy has helped insurance companies to earn better liquidity.
“Insurance companies now have more liquid cash if you look at most of the underwriters and what this means for the insured is that insurance companies don’t have any excuse to delay or refuse to settle claims. This is because we have done it on the basis of ‘cash-and-carry’, so when there is a claim, you must settle.”
He assured that that NAICOM will now enforce prompt payment of claims whenever the need arises. “Soon, we are going to take the issue of claims settlement very stringently because Nigerians must get the best of insurance”, he added.
The Commissioner for Insurance dismissed reports that government is yet to comply with the regulation.
His words: “The government is completely compliant. The biggest account that is with the Nigeria insurance industry today is that of the Nigeria National Petroleum Commission (NNPC) and NNPC by 31st of March last year paid over $75, 000 and by 31st of March this year, they have paid the same amount.
“The Head of Service Group Life is the biggest Group Life account in the country. They did not pay the premium until 24th of April and the cover was exempted from that period.”
By David Adelowokan