IFRS: 40 underwriters refuse to comply due to lack of sanction

 

Chuks Udo Okonta

The underwriting firms that have failed to submit their 2012 International Financial Reporting Standard (IFRS) compliant accounts, may have taken advantage of the absence of sanctions in the policy, Inspen can report.

The National Insurance Commission (NAICOM) said it has received only 18 accounts, at today July 1, of which three have been approved.

A statement by the Assistant Director NAICOM, Salami ‘Rasaaq, said the approved accounts are those of Mansard Insurance Plc, ADIC Insurance and WAPIC Insurance Plc.

 He noted that the account of First Bank Life Assurance was queried and the commission is awaiting the firm’s response, also queried and awaiting response are those of Continental Reinsurance Company Plc, Law Union and Rock insurance.

He said the response on the query meted on Consolidated Hallmark Insurance, AIICO Insurance and Oasis Insurance is under review, while review is in process on the accounts of UBA Metropolitan Life, Custodian and Allied, NEM, Crusader General, Crusader Life, Zenith General, Zenith Life, FIN Insurance and Standard Alliance Life.

A reliable source in the NAICOM said the commission is helpless as to imposing sanctions on errant operators as there is no law to enforce such decision in the IFRS guidelines.

He said the commission can only leverage the provision in the Insurance Act to sanction errant operators, adding that the only sanction for operators that failed to meet the deadline for submission of results is daily payment of N5000 fines stipulated in the industry’s Act.

At a time when Banks and Pension Fund Administrations (PFAs) have put the issue of complying with the IFRS behind them, underwriters said they are still making effort to master the new reporting system and plead for more time to enable them understand the system.

The Managing Director of one of the firms that is yet to submit its account, said the firm and others are working hard to align their accounts with IFRS, adding that as a new reporting system they are faced with new challenges.

He noted that the three firms that have scaled the hurdles have long been experimenting on the new reporting system.

Director-General Nigerian Insurers Association (NIA) said the association is worried over the inability of members to produce the required account.

He said:  “Anything that is not going well should be a concern to us. The issue is not that the operators do not have the capacity to comply, but anything that is new requires sometime.

“Our members have gone through a lot of capacity building in this area and efforts are being made to comply. I thing we need to give them so time.

“I am aware that all our members are making effort to comply. Note that the issue is not just having an account, but a case of ensuring that the account complies with the standard.”