The National Insurance Commission (NAICOM) has revealed that it is still awaiting the financial accounts of 12 insurance companies that are struggling to comply with the International Financial Reporting Standard (IFRS) 17. Despite the extension and support from NAICOM, these firms have faced challenges in aligning their reporting structures with the new global accounting standard, which aims to improve transparency and comparability within the insurance sector.
In a recent report, NAICOM disclosed that a total of 44 insurance, reinsurance, and takaful firms have successfully submitted their 2023 financial accounts and secured the commission’s approval. This approval process is an essential step in ensuring that the financial statements of insurance entities meet the requirements set out under IFRS 17, which came into effect for the financial year beginning January 2023.
The Insurance Act mandates that all insurance firms must submit their audited financial accounts by June 30 of each year. Failure to comply results in a fine of N5,000 per day. While the majority of insurance companies have adhered to the timeline, 12 firms are yet to submit their accounts, facing significant hurdles in adjusting to IFRS 17 standards.
NAICOM has taken proactive steps to enforce compliance with regulatory requirements by offering guidance and extending deadlines. These efforts are aimed at ensuring that all entities in the industry operate within the legal framework, thus promoting greater transparency and stability. According to NAICOM, the approval of financial accounts under IFRS 17 will enhance the credibility of the Nigerian insurance market and boost policyholder confidence.
“The transition to IFRS 17 is a significant milestone for the insurance industry, and it is crucial for all stakeholders to comply with this global standard. Our objective is to build a trustworthy and transparent insurance sector that protects policyholders and contributes to economic growth,” NAICOM stated.
As the industry adapts to the new reporting standards, the commission continues to monitor and provide support to ensure full compliance. The shift towards IFRS 17 is expected to strengthen the insurance market’s resilience and accountability, ensuring a robust financial system for the future.
NAICOM’s dedication to enforcing these standards signals its commitment to maintaining a healthy, competitive, and reliable insurance sector in Nigeria.
