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NAICOM to bar insurance CEOs from foreign trips

By on February 18, 2015

The National Insurance Commission has said it will ban chief executive officers of insurance firms who fail to submit their companies’ 2014 financial accounts at end of the deadline given to them to do so from embarking on foreign trips on the companies’ expenses and other capital expenditure.

The Deputy Commissioner, Finance and Administration, NAICOM, Mr. George Onekhena, disclosed this to our correspondent in an exclusive interview.

“Until we get their accounts, we will not allow the chief executive officers to travel on foreign trips at the expense of the companies; we will not allow capital expenditure and some other expenses without approval,” he said.

The commission stated that the 2013 financial statements of insurance companies revealed that only 36 firms out of 59 submitted their accounts at the end of June 2014 deadline.

Onekhena said the law spelt out penalties for late submission of accounts, adding that henceforth, the commission would be holding the chief executive officers responsible for poor accountability and the inability of the companies to pay dividend to their shareholders.

According to him, such lateness and inability to create wealth for stakeholders expose poor governance in the insurance firms and NAICOM is conducting a study on their activities and performances so as to know what is wrong with the firms.

He said the commission was becoming more proactive in regulating the firms and hoped to see more improvement, adding that about 12 companies had already written undertakings to produce their 2014 accounts latest by April this year.

Onekhena said the deadline for the insurance firms to submit their accounts was June ending, but that those quoted on the Nigerian Stock Exchange had March ending as their deadline.

He, however, explained that there could be some very practical reasons why the companies might experience delay such as the change of accountant, change in leadership and computer failure, among others.

“It is important to understand why some things happen before you take action; but now, we are proactive, we are going to be monitoring them,” he said.

The Commissioner for Insurance, Mr. Fola Daniel, said shareholders should demand more accountability from the insurance companies.

“Shareholders should have a change of heart and live up to their responsibilities by taking keen interest in what happens in the companies. It is also imperative that the various shareholders’ associations look inwards and purge themselves of fakes,” he said.

Daniel said shareholders should note that delegation of their responsibilities to the boards and management of their companies should not translate into abdication.

He observed that most of the shareholders were not asking questions on how well their companies were being managed by their representatives.

According to him, beyond the annual general meetings, shareholders should seek information and get satisfactory feedback from their boards and management by engaging in intelligent and constructive interrogation of the financial reports of the companies.

If they are not doing this as shareholders, it means they have no interest in protecting their investments, according to the commissioner.

Daniel said that the main objective of every investor in a company was to get return on his investment by way of dividend, capital appreciation, rise in the price of stock and bonus issue.

He said the best managers of business were the owners, because they were better focused on achieving set goals and objectives.

 

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