NAICOM refers NICON, UNIC, Guinea to FRC over statutory compliance failures

Insurance regulator, the National Insurance Commission (NAICOM), has referred three insurance companies, NICON Insurance, UNIC Insurance and GUINEA Insurance to the Financial Reporting Council (FRC) for non-compliance with statutory requirements.

The statutory requirements, which are in three different levels, involve Minimum Capital Base, Solvency Margin and Asset Cover.

Each of the three companies the commission said breached one or more of these statutory requirements in their 2015 financial returns and has been referred to FRC for appropriate action.

Meanwhile, NAICOM has also reported former directors of Godlink Insurance plc to the Economic and Financial Crimes Commission (EFCC) for illegally allocating shares of the company to themselves without paying for them.

These were disclosed weekend by Olufemi Oluniyi Oba, director, supervision, NAICOM, at a seminar for Insurance and Finance Correspondents held in Gombe, Gombe State.

It is a requirement of the FRC that financial industry regulators refer companies under their watch that fail any of the statutory test to the Council, who in turn will verify and take appropriate actions, Oba said.

He said the level of compliance by insurance companies had improved unlike previous years, particularly in terms of submission of annual and quarterly returns, “they are beginning to understand how they report, appreciate penalties and doing things properly.”

Companies such as African Alliance and Linkage Assurance plc accounts are under processing with the commission, while 44 companies have received approval of their 2015 accounts, he said.

While IGI, A&G Life, A&G General Insurance, International Energy Insurance are among nine insurance companies that are yet to submit their accounts to the commission.

The commission said that in the process of investigations carried out by forensic review on Goldlink Insurance they found out that some directors were claiming to be majority shareholders while in the real sense they were not.

Following the investigation, the directors were directed by the commission to relinquish there shares, which they did voluntarily and the board were later dissolved by the commission.

The commission added that without a share audit, the commission would not had been able to find out the actual shareholders of these companies.

The commission further said that they collaborated with other regulatory agencies such as SEC to see that they recover these unpaid shares.

It also disclosed that the commission had referred some of these issues to the relevant law enforcement agencies to ensure these issues were properly addressed.

The commission also confirmed the refund of N66 million by one of the chairman of an insurance company under regulatory intervention, although, the name of the concerned chairman was not given by the commission.

The commission noted that regulatory order only restrict spending limit in such a way they had to send it to the commission for approval, while adding that claims and reinsurance were not part of the issues referred to the commission for approval.

The commission pointed out that regulatory order should not be a reason why companies were failing in their responsibility to their investors and insuring public.

The companies are placed on regulatory order because they have been found wanting in significant issues of regulations, such as corporate governance, internal struggles, financial issues, solvency, inability to pay claims, etc, he said.