Directors and management staff of insurance firms, who lack relevant strategic and competent operational requisites may lose their positions in the current business year, as the industry regulator, the National Insurance Commission (NAICOM) is set to embark on screening to ascertain those who are qualified to serve as board members and management staff of insurance firms.
The Commission recently expressed concern about poor performance of some board members and management staff of insurance firms.
The commission, also requires insurance firms to beef up technological know- how of their workforce as well as the status of their information technology systems in
preparation for transition to electronic submission and treatment of accounts of insurance companies this year, a major shift from the hitherto manual system.
The Commissioner for Insurance, Alhaji Mohammed Kari, stated these in a circular to board members and chief executives of insurance firms released recently stated:
“The Commission is concerned about the performance of some boards and managements as reflected in their work not only from compliance perspective but also in terms of strategic and operational choices they make.
Kari, who described the situation as a challenge, said to elicit positive change, the commission, would develop a mandatory competence profile for Directors and persons in Senior Management and Key functions in liaison with relevant organs of the industry whilst considering a number of mandatory learning requirements/trainings for Directors.’’
Kari, who disclosed that this will take effect this month (February), further said in line with corporate governance requirement, the Commission expects all directors of insurance institutions to rise up to the challenge of not only ensuring that their Companies comply with relevant laws but also that their activities take into account the interest of all stakeholders especially Policyholders and providers of Capital.
He said the Commission, will pay more attention to the behavioural aspects of Corporate Governance and extract accountability from relevant parties, especially Directors and members of Management, adding, consequently, all Insurance Institutions are required to forward, to the Commission, planned schedule for their Board meetings for the year 2017 not later than February 10, 2017.”
Kari, said electronic submission of accounts by insurance companies will take the place of manual and paper submission effect from this year.
He said the commission is going to leverage on information technology to improve effectiveness and reduce regulatory burden of manual operations on insurance Institutions.
It noted that to achieve the initiative, it will establish a framework for Information technology supervision of insurance Institutions and promote arrangements for efficient and more cost effective applications in the Insurance Industry.
The commission, which is worried about late submission of accounts by insurance firms, said a number of Companies submitted their Statutory Returns for the year 2016 late, stressing that the delay in submission of accounts deprives the Commission, policyholders, insurance intermediaries, analysts and other stakeholders of the relevant information about the performance and financial condition of the companies, as well as the level of their compliance with relevant provisions of the law.
“The Commission, is poised to implement relevant measures to discourage Companies from filing late returns and sanction errant ones appropriately, said 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 its website for public guidance.
It urged 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 therefore an indication of the failure of the Board.
“In order to facilitate the timely rendition of Returns, the Commission will carry out a review of the current Returns requirements and streamline them for more efficiency in preparation and submission. The transition to electronic submission will commence this year,” it maintained.