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Financial Reports Compliance: Stakeholders Seek Action On Erring Companies

Brokers Urges Apex regulator to suspend, or cancel licenses of companies that failed to submit annual financial reports

Stories: Anurica Nwachukwu

Stakeholders in the insurance sector have urged National Insurance Commission (NAICOM) to sanction erring insurance companies that delay financial report late and others that do not submit at all to the commission by suspension or cancellation of their License.

A lot of efforts have been made by the Commission and association bodies in the insurance sector over the years to curb this menace of poor or late and non rendition of financials by operators but it seems that the warnings and sanctions have falling on deaf ears.

Speaking with the Managing Director/ CEO of Prestige Assurance Plc about this ill in the sector he stated that the companies should abide by the rules and regulations of NAICOM on rendition of accounts and failure to do so should lead to suspending or cancelling their License.

“The Companies licensed and operating in Nigeria have to follow the Rules and Regulations framed by the regulator, NAICOM. Non-compliance to the regulations by any insurance company should be subject to

NAICOM levying them heavily even up to the extent of suspension/ cancellation of their licenses”. he said

Section 26(1) of the Insurance Act 2003 stipulates that every insurer shall not, later than June 30th of each year, submit to NAICOM, a balance sheet duly audited showing the financial position of the insurer and its subsidiaries at the close of the preceding year together with a copy of the relevant profit and loss account which the insurer is to present to its shareholders at its annual general meeting.

A stock broker /CEO … Mr Oluwole………

Already, defaulting insurance companies that have not submitted their accounts to NAICOM are being made to pay a fine of N5, 000 for each day of default in accordance with section 26(3) of the Insurance Act, but it appeared that they prefer to pay the fine than to follow the rule as these forms the basis why more stringent sanctions are being proposed to bring sanity into the sector just like in banks.

In spite of the sanctions meted out for the insurance companies that fail to submit their financial results as at when due and according to International Financial Reporting Standards (IFRS),it appears that the companies are not shaken as they have remained adamant.

According to the information obtained from The National Insurance Commission (NAICOM) website, nine companies out of the 59 insurance companies have not submitted their fourth quarter 2014 returns to the commission.

In the same vein, three insurance companies namely: Alliance & General Insurance Company (A&G), Alliance & General Life Assurance Plc and Springlife Assurance Company are yet to submit their financial results for 2012, 2013 and 2014 to the commission.

However even as most of the insurance companies have submitted their fourth quarter 2014 report, 5 of them are still under review,9 were tagged queried and awaiting response , AIICO insurance query is still under a review process while 9 have been approved.

To help members to cross this hurdle Nigerian Council of Registered Insurance Brokers (NCRIB) established an accounting technical committee.

According to the president of the council, the committee comprises of existing and co-opted accounting and finance professionals that handle issues relating to financial reporting requirements from the insurance brokers..

NCRIB’s Assistant Manager public Relations & Communication, Dele Ayeleso, told The Union that the committee was established to help members who were then battling with their financial report in response to NAICOM’s mandate to be IFRS compliant and the council has been organizing seminars in collaboration with NAICOM to sensitize members, so that they do not default.

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