Some insurers budget for fines – Investigations

Daniel

Chuks Udo Okonta

Determined not to comply with statutory regulations, some insurance operators now make provisions for fines in their budgets, thereby making it easy for them to flout laws and pay penalties.

An expert who is knowledgeable about this new illicit device told Inspen, that the operators at the beginning of the year, resolved on the laws they are to comply with and those they are to flout and make budgetary provisions to cater for the penalties.

He said one for the laws the operators budget for is the section of the Insurance Act 2003, that stipulates the time for submission of annual accounts, adding that though the law states that accounts should be submitted not later than June 30, and failure to comply attracts a daily N5,000 fine, the errant operators flout the law, relying on their planned budget to pay the fines, even for a year.

He noted that some operators are hellbent on flouting stipulated rules, stressing that they are never prepared for the change being preached by the regulator- National Insurance Commission (NAICOM) and other concerned parties.

The expert noted that instead of the errant operators to comply with rules, they go about castigating NAICOM of highhandedness.

Commissioner for Insurance Fola Daniel, who is worried about this ugly development and several others, had accused the operators of blotted overheads, stressing that money that would have been used for developments and paid to shareholders as dividends are expended on fines.

He also frown at the submission of annual accounts by companies before Christmas, adding that it shows that either the company is lacking integrity issue or they are withholding some information to the public.

He noted that going forward insurance companies must comply with all requisite regulatory requirements without plea subsidies from the commission, stressing that the Commission has resolved to issue appropriate regulations that would enthrone these best practices. 

“It is high time we all stepped up our game and learn to play by the rules. It is only by so doing that we can achieve real growth and development in the industry and make meaningful contribution to the economy”, he said.

He assured that the commission will continue to create the right environment for ethical behaviour and conversely, where it identifies actions detrimental to the interest of the industry, it shall take corrective steps as part of its mandate.