Shareholders want reasons for fines in insurers' financial accounts

Chuks Udo Okonta

Shareholders have called on the National Insurance Commission (NAICOM) to henceforth mandate insurance companies to state the reasons for which they incur fines in their financial accounts to enable them reduce unnecessary payments on offences that affect their investments.

The shareholders who spoke in reaction to the remark by NAICOM that what ought to be their dividends are used by companies to pay avoidable fines, called on NAICOM to go beyond just asking firms to state infractions in their accounts and assist shareholders in protecting their investments, by instructing companies to give detailed breakdown on the penalties for which they are fined.

The President, Nigerian Shareholders’ Renaissance Association, (NSRA) Olufemi Timothy, told Inspen that the documentation of reasons for fines would help shareholders know who is culpable and what should be done to stem such offence.

He said: "It is necessary shareholders know why their companies are fined. This will enable the companies investors know the kind of offence committed and watch against it in the future. It will also help to determine who is culpable in the company."

He noted that shareholders invest their hard earned income in companies to have return in investment, adding that situations where companies mismanagement funds entrusted to them and leave the investor suffer, should be discouraged by government and regulators.

National Coordinator, Pragmatic Shareholders Association of Nigeria (PSAN) Mrs Bis Bakare, called on NAICOM to go beyond reporting of infractions in annual accounts of firms and ensure that firms state reasons for infractions to enable shareholders query them appropriately.

She noted that shareholders had at several fora sought from their organisations reasons for delays in the presentation of their accounts, and that the firms often attribute the delay to NAICOM's refusal to approve the accounts on time.