House of Representatives Committee on Capital Market and Institutions has alleged that there are serious infractions on the part of major insurance company in Nigeria.
The lawmakers alleged that consultants engaged by the committee have raised concerns over various operational challenges endemic in the industry.
Making the allegation yesterday during the committee’s seven-day public hearing on the level of compliance with operational and regulatory requirements, the Chairman, Hon. Tony Nwulu, condemned previous failure of operators in the sector to respond to allegations relating to mismanagement of shareholders’ funds brought against them.
While quite a handful of the insurance companies operating across the country were at the public hearing, the committee sent warning to Niger Insurance, International Energy Insurance, Guinea Insurance, Universal Insurance Company Plc, Law Union and Rock Insurance, Real Exchange Plc, Continental Re-Insurance, Cornerstone Insurance and Sovereign Trust Insurance Company that were absent at the event.
The committee vowed to issue the non-complying insurance companies summons to appear at the investigative public hearing on their level of compliance with operational and regulatory requirements, warning that refusal to comply will make them face the wrath of the law.
Though preferring to keep details of the illegality being perpetrated by operators in the sector secret pending when the insurance companies get the details of the infractions being levied against them, Nwulu said: “The insurance industry is ailing seriously.”
He said the public hearing is against the background of recent calls for recapitalisation and the need to protect shareholders funds.
Aside mandating insurance companies in Nigeria to summit their management reports, the committee, which gave the allegedly erring insurance companies a window of opportunity to see the details of the allegations against them and prepare responses, said there would no longer be reprieve for any erring operator going forward.
“Those that are unfit to remain in business, we should know, and shareholders should understand what has happened and move forward,” Nwulu stressed.
Reacting to the development, a member of the committee, Hon.Uzoma Nkem-Abonta (PDP-Abia), challenged the committee to uphold the oath of office to expose corruption and wastages in the insurance sector as stipulated in Sections 88 and 89 of the 1999 Constitution.
Expressing concern over some of the undisclosed infractions, Nkem-Abonta said: “I see a lot of inside trading and personal interest of directors,” noting that the issues should be canvassed openly, he said: “What we are trying to protect are already in the public. So when it becomes speculations, it becomes more dangerous.”
The lawmaker emphasised that the investigative public hearing was aimed at publicly determining the degree of veracity of allegation of infractions bothering on breach of various statutory requirements to publish annual report and payment of taxes, which he said cannot be concealed by the parliament.
According to him, “Evading those constitutional and regulatory requirements cannot be done as a private hearing, so we must publicly do so.”