Nigerian insurance firms, whose financial accounts are yet to be summited before March 31, 2017, would be barred from engaging in further business activities, industry regulator, National Insurance Commission (NAICOM), has revealed.
The Commission affirmed that it would take action against officials responsible for financial reporting, as well as publish the compliance status of insurance firms on its website for public guidance.
NAICOM maintained that the decision to impose sanctions on such companies became necessary, as their default deprives the Commission, policyholders, insurance intermediaries, analysts and other stakeholders of the relevant information about their performance and financial conditions.
The insurance Act imposes a daily fine of N5,000 on firms that failed to meet the March 31st deadline for the submission of their accounts.
“The Commission is poised to implement relevant measures to discourage companies from filing late returns and sanction errant ones appropriately. Amongst others, this will include a detailed review of their accounting and financial reporting systems, restriction of certain activities until relevant returns are filed, action against officials accountable for financial reporting as well as publicising the compliance status of insurance institutions on our website for public guidance,” it said.
NAICOM also advised boards of companies to take interest in the timely filing of returns, which, incidentally, contain information they need to effectively perform their oversight function, adding that the non-rendition of returns is an indication of the failure of the Board.
It noted that to facilitate the timely rendition of returns, it will carry out a review of the current returns requirements and streamline them for more efficiency in preparation and submission.
It added that the transition to electronic submission will commence this year, and asked companies to send in their suggestions on areas for improvement not later than February 10th.
The Head, Corporate Affair and Human Resource Manager, Nigerian Insurer Association, the umbrella body of Insurance companies in Nigeria, Iyasere Davis, said that it is the duty of the Naicom to exercise authority over the insurance operators to do what is necessary as the time they should.
Davis, urged operators to also increase the level of their compliance of law in the sector that would drive success at the end of it all, he said.