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NAICOM fines insurance firms N543.69m

By on February 28, 2015

The National Insurance Commission has collected N543.69m as fines from insurance companies for various infractions of laid down regulations and professional misconduct.

The Deputy Commissioner, Finance and Administration, NAICOM, Mr. George Onekhena, who disclosed this to our correspondent during an interview, also said the commission had improved the risk-based supervision approach to ensure that companies complied with its rules and regulations in order to perform optimally.

“Some insurance companies have paid fines totalling about N543.69m for various offences over a period of time,” he said.

According to him, the commission’s record revealed that the companies paid N81.3m and N206.57m in 2011 and 2012, while the 2013 account and 2014 unaudited report showed that they paid N170.52m and N85.29m, respectively.

Onekhena noted that the companies were, however, complaining of too much supervision, incessant checks on their books and fines by the commission.

According to him, NAICOM will not tolerate any form of irregularities in the books of insurance companies, adding that in extreme cases, it has taken over the management of a few of them as part of its regulatory functions.

The Commissioner for Insurance, Mr. Fola Daniel, said the firms should expect stricter regulation going forward.

He added that the commission would not hesitate to impose stricter penalties on errant operators that failed to comply with the industry’s rules and regulations.

“When people are becoming hardened, we are also looking at how to effectively deal with them. For any insurance company that may be complaining of N500,000 or N200,000 fine, we have promised them that they will get N5m, N10m even multiple of that as fines,” Daniel said.

While stressing that the commission would rather increase the fines for offences, he said it was necessary to compel the operators to obey the law.

The commissioner said that when the shareholders would see questionable expenses in the companies’ books, they would be forced to ask questions from the managements on why the firms had to lose such amounts to fines.

Such strict measures, he said, would make the managements of such firms to be more serious with their jobs instead of breaking rules.

“One of the complaints we received from the industry last year was incessant inspection of their books because some significant companies were inspected many times and this was because we wanted to know exactly what they were doing,” Daniel said.

He added that the commission saw reasons to ask questions on why huge expenditures were made and how some big businesses were underwritten.

Daniel also said the commission had ensured that risks, which could be retained in the country, were not unlawfully taken out by firms who got such businesses.

In cases where such risks were to be insured abroad, the commissioner said NAICOM had intervened and ensured that local capacity was first exhausted before the rest were taken out.

 

[Punch]