NAICOM moves to check fictitious premium receipts

WORRIED by the increasing unprofessional conduct in the industry particularly among insurance brokers, bothering on overriding commission, unremitted premium, rate cutting, premium purchase, and compliance with the International Financial Reporting n(IFRS), the National Insurance Commission (NAICOM) has rolled out new returns guidelines to operators in the industry.

The new directives which commenced April 1, 2015, required that insurance brokers notify the commission their business transactions as they occur monthly, quarterly, by-annually and annually, such that inspectors of the commission would follow up with the remittance process of premium receipts.

According to a circular signed by the Director Supervision of the commission, Nicholas Opara, on harmonization of returns by April 1, said “commission in furtherance of its determination to enthrone regulatory clarity particularly with respect to regulatory returns requirements, it became imperative to harmonize the process of obtaining various returns from insurance institutions.

Industry sources said the new directives is in line with the commissions determination to restore the image and trust of the public in the industry as the Commissioner for Insurance, Fola Daniel, told the summit of insurance practitioners recently that “The action of the commission has become necessary as a cursory look at recent occurrences in the sector will reveal that the insurance industry is at a very critical cross road as regard its operations and regulation. Legislations and guidelines are flouted at will by operators and consumers alike, non-adherence to the provisions of the law, delayed claims settlement, rate cutting and other sharp practices in the industry.”

The NAICOM boss said “We cannot continue in this path any longer., There must be a change of attitude and behavior amongst operators. We cannot continue to do the same thing all the time and expect a different result.” The future is bright for the industry, he said, if only we could be more professional in our approach to the business of insurance.

Also, the Director of Supervision, NAICOM, Nicholas Opara, speaking at a training workshop on IFRS for insurance brokers recently, said that as at March 2015, two years after the new IFRS dispensation came into effect only 200 insurance brokers have submitted 2013 audited financial reports to the commission for approval.

According to him, the remaining 300 brokers by our register have not attempted to submit anything. He regretted that among the 200 insurance brokers, 54 got approval of 2013 audited financial returns
But majority of them despite the fact that the country had migrated to IFRS from the Nigerian Generally Accepted Accounting Principles (NGAAP), only recycled the NGAAP and filed with the commission for approval. He warned that the 2015 licence will not be renewed without obtaining approval of the 2013 audited financial statement and accounts.