Poor governance structure responsible for insurance failure, says NAICOM
The National Insurance Commission (NAICOM) has said poor governance structure is the major factor responsible for the failure of some underwriting companies across the country.
The Commissioner for Insurance, Sunday Thomas, said that corporate governance guidelines would ensure resources put into the insurance sector are well protected and effectively utilised.
He said the Commission would not take measures against the management of any failed insurance company.
Thomas said that the first set of risk-based supervision would take off in August. He said to make this happen in the sector, relevant persons have been trained by the Commission to commence the exercise.
According to him, the traditional method of insurance is becoming outdated and inadequate to take care of the speed needed in the market to reach out to the public.
“There are a few that have been developed but awaiting final touches for them to be released. Companies do not fail on their own; people make companies fail. Companies do not die; companies are killed.
“The death of companies evolves from poor governance structure most of the time. Effective since June 1, the corporate guidelines had become effective,’’ he explained.
He stressed that NAICOM was committed to getting support from the Minister of Finance, Budget and National Planning, Zainab Ahmed, for a guideline that would make it mandatory for all Federal Government firms to make adequate provision for their insurances.
He said about N9.2 billion has been set aside for the 2021-2022 financial year for group life insurance of federal government agencies.
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