James Emejo and Ebere Nwoji
Insurance industry regulatory authority, the National Insurance Commission (NAICOM) has said that in carrying out its oversight functions on insurance industry operators, it will leave no stone unturned in exposing directors and managers of firms who have defrauded their individual firms for self-enrichment.
The commission revealed that it has already retrieved the sum of N66million from a former chairman of an undisclosed operating firm, insisted that it will continue to beam its search light on operators to ensure that such directors and managers cough out every fund they have stolen from their companies.
The Commissioner for Insurance, Alhaji Mohammed Kari, who stated this at the 2016 insurance seminar organised by NAICOM for journalists in Gombe State, disclosed that the commission, has dragged some financially reckless directors and managers of insurance firms to the Economic and Financial Crimes Commission( EFCC) to retrieve the money they had stolen and ease financial constraints of the companies they managed, many of which they have rendered financially impotent.
“I can confirm to you that one chairman returned N66 million. We have identified quite a number of cases like that and we have stood our ground that they must refund it because it is share holders’ and policy holders’ money, it is not their money. And that is not all, we have also like what we did on companies under intervention, we have discovered that some shareholders or directors acquired shares without paying and we have taken them to EFCC, we are trying to get them cough out what they have taken. Those refunds can ease the financial constraints of the companies and those actions they have taken are criminal acts and the law enforcement agents have the right to treat them as criminals and we believe it will help to restore confidence of shareholders in the industry”, he stated.
He said that the efforts were geared towards growing the industry, noting that insurance industry is the only growth area left in the finance industry.
Speaking at the event, Director, Finance and Accounts of the Commission, Mr. Nicholas Opara said on the insinuation that insurance companies are not making profits therefore not paying dividend, looking at the reports of insurance firms on current bases, insurance firms are making profits.
He however explained that why they are not paying dividend was because following the 2008 down turn in the economy, which affected capital market, a good number of insurance firms incurred huge losses and where the losses were not pronounced, on conservative reasons , a good number of insurance firms were required to make huge provisions for doubtful investments so the effect of that, threw their reserves into negative and under CAMA, operating firms are not allowed to pay dividend based on profit they made in the current year when their reserve is still in negative.
According to him, companies may make profit on current year but the commission would require them to extinguish the negative reserves that they are carrying in their books before they can pay dividend.
Opara expressed optimism that if they sustain the current momentum in profit making, in no distant time, they will be able to wipe out those negative reserves and apply their current profit in payment of dividends.