Don't Miss

Anxiety grips insurance firms as SEC, NAICOM investigate misuse of funds

By BusinessNews Staff on February 14, 2015

Anxiety has gripped the boards and managements of some insurance companies that misused funds raised from the capital market as the Securities and Exchange Commission (SEC) and the National Insurance Commission (NAICOM) have resolved to penalise the companies involved.

The Deputy Commissioner of Insurance, Technical (NAICOM), Mr. Mohammad Kari, had during a visit to the acting Director General of SEC, Mr. Mounir Gwarzo, hinted that some cases of misuse of funds were being investigated by the insurance industry regulator .

Kari, therefore sought the support of SEC as the apex regulator of the Nigerian capital market to bring the perpetrators to book. Gwarzo assured NAICOM commissioner of SEC’s support and readiness to bring those involved to justice. THISDAY checks revealed that some of the boards of companies involved are already getting jittery given the renewed stance of the SEC management on zero tolerance for market infractions.

According to Kari, the case being invested included funds that were raised by some insurance companies and were applied for other use.

Gwarzo said the two regulators would work closer to ensure erring persons or institutions are swiftly brought to book.

“We are ready to work closely with NAICOM to resolve these cases,” he said.
Currently, collaboration between the two institutions happens within the framework of the Financial Services Regulation Coordinating Committee (FSRCC). However, Gwarzo believes the collaboration could be even stronger and more result oriented if the two regulatory bodies were to set up an inter-agency committee for speedy resolution of the issues.

He said: “The FSRCC was established to facilitate collaboration across the entire financial system. But beyond that platform, we need to create an inter-agency committee involving specific contact persons between our two institutions who will strengthen the synergy between our respective areas of oversight.”

Earlier, Kari enumerated the giant steps taken by NAICOM to build a strong and vibrant insurance industry in Nigeria, including the insurance industry recapitalisation exercise of 2005 in which the SEC played a prominent role.
The recapitalisation, according to him, led to significant consolidation in the sector with the number of players shrinking from over 100 to 57, which are now stronger insurance services providers.

He noted that NAICOM requires the continuous support of the SEC in its bid to further develop and regulate the Nigerian insurance industry.

Speaking in the same vein, Gwarzo stated that the deadline for the on-going recapitalisation by capital market operators has been extended, noting also that the financial markets will be better with strong institutions. He assured NAICOM of full collaboration to resolve all outstanding issues relating to rule breaches with a view to ensuring a safe and healthy financial industry for the Nigerian economy.

[ThisDay]

headline