IFRS: One underwriter scales NAICOM’s hurdles

 

Chuks Udo Okonta

The National Insurance Commission (NAICOM) has approved the 2012 International Financial Reporting Standard (IFRS) compliance account of one insurance company, Inspen, has learnt.

Director Supervision NAICOM, Nicholas Opara, disclosed this in a telephone interview, adding that the commission has received IFRS prepared accounts from five insurance firms.

He noted that NAICOM observed some irregularities in the four accounts that are yet to be approved and that the observations have been communicated to the affected companies.

Opara noted that the commission would approve the pending four accounts, as soon as the organisations are able to effect the observations.

He said none of the two reinsurance firms have so far submitted their accounts and that the June deadline for submission of accounts still remains.

He maintained that the commission would never approve any account that fails to meet the required standard.

He expressed misgivings over how most operators handle their accounts, stressing that underwriters lack justification for not producing standard accounts as they are given enough time by the commission to do so.

Opara called on members of audit committee to ensure that their firms' accounts are well prepared, stressing that the NAICOM is worried over the role played by the professionals engaged by firms to oversee the production of their accounts. 

 NAICOM said following the announcement of the adoption of the Nigeria road map to IFRS by the federal government; it expects insurance and reinsurance companies to take appropriate steps to ensure a seamless transition to the new financial reporting regime. It noted that to this end, all insurance and reinsurance companies are to submit their plan, for conversion to IFRS, by April 1, 2011. Thereafter, information on the progress made in the implementation of the said plan should be provided in the quarterly return to it.

It said: “This should include, but not limited to, information on the following issues, accompanied with timelines, where necessary: IFRS awareness and knowledge acquisition, conversion management and outline of conversion plan, detailed Gap and IFRS impact analysis, draft IFRS-compliant financial reports, communication channel with relevant stakeholders

“The financial statement for the years ending 31 December, 2010 should disclose this plan and possible impact of IFRS on the opening balances for the year 2011. In particular, the opening balance sheet for the year 2011 and their reconciliation to the closing for the year 2011 should be submitted to the commission not later than 1st September, 2011.

“The IFRS opening and closing balance sheets, which should form the comparatives for 2012 financial reporting, shall be audited.”