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| Daniel |
Chuks
Udo Okonta
The
National Insurance Commission (NAICOM) has asked insurance operators to prove
how its regulatory activities stifled their performances.
The
Commissioner for Insurance Fola Daniel, said this in Lagos, adding that some insurers
in spite, the considerations made by NAICOM against the backdrop of massive
investment losses following the capital market crash of 2009/2010, go about complaining
of over-regulation, saying the regime of fines and penalties has become
punitive.
He
noted that this is most unfortunate, as the operators have made this avoidable
scenario look more important than driving growth and value.
"So
far, your members are yet to demonstrate how regulation stifled the performance
of insurance companies. It is pertinent to note that every report from
international organisations and rating agencies have continued to rate the
Nigerian insurance industry as being under-regulated.
"From
the audited financials of nearly a dozen insurance companies, solvency gaps are
recurring features of their activities for as much as three consecutive years.
Appropriate regulation should have resulted in either suspension of the
operating license and possibly withdrawal.
“The
Commission had chosen to show some understanding against the backdrop of
massive investment losses following the capital market crash of 2009/2010.
Whereas other sectors have achieved reasonable recovery, insurers and NAICOM
may no longer be able to invoke the excuses of the market crash as
justification for the poor turn of event.
“The
Commission shall therefore have zero tolerance for solvency gaps in the ensuing
year in the interest of the insuring public and for the avoidance of exposure
of NAICOM to regulatory risk," he said.
On
late submission of audited report, Daniel said, "Whereas the Insurance Act
2003 provides for submission of annual accounts no later than 30th June, the
requirement by the Nigerian Stock Exchange for listed companies is 31st March.
The Commission had in the past continued to plead for the sector with other
regulators for forbearance. Will this qualify for over-regulation?
"Some
of your members do not submit annual accounts before Christmas. Going forward,
insurance companies must comply with all requisite regulatory requirements
without plea subsidies from NAICOM."
He
said the commission has resolved to issue appropriate regulations that would
enthrone these best practices.
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