The Nigerian Insurers Association (NIA) has said it is engaging the National Insurance Commission (NAICOM) on areas of concern, over the circular on tenure limit for chief executive officers (CEOs) of insurance companies.
Olusegun Omosehin, NIA chairman, said this at a news conference in Lagos at the weekend. Omosehin said while the insurers had aligned with the directive of the commission, the association was appealing for consideration on some grey areas.
“Our position is to align with the directive of the commission, but we have a few concerns on the definition of the executive directors (EDs) which we have put forward to the commission.
“As an association, we know that there are certain things we can appeal to our regulator, if we see the significant impact it might have on the industry.
“It is the prerogative of the commission to accept or reject our position. In the NAICOM circular, there was a cumulative period for EDs; where an EDs is appointed the CEO/managing director (MD), he or she cannot spend more than the cumulative period of 15years.
“You and I know the reality of things in these institutions and MDs are better chosen from within, except in some circumstances where you can’t find a replacement within, we go outside.
“We still want a situation where that part can be encouraged for people to be chosen from within and given a mandate to run full term, if accepted by the commission,” Omosehin said.
NAICOM had in a circular dated November 22, 2022 introduced tenure limits for EDs of insurance and reinsurance companies in Nigeria with effect from Jan.1, 2023.
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The circular titled: Tenure limit for executive directors of insurance and reinsurance companies stated that CEOs and other EDs of insurance and reinsurance companies shall serve a maximum tenure of 10 years comprising two terms of five years each, subject to a single approval of the commission.
The commission said an ED who becomes a CEO in the same company shall serve a cumulative tenure not exceeding 15 years. The regulator directed that where an ED changes portfolio by moving to another position of ED equivalent within the same company, the period spent in the previous company as ED will count for the purpose of determining the maximum tenure of the said ED.
“In respect of insurance companies that are a product of a merger, acquisition, takeover or any other combination, the 10 years period shall include the pre and post-combination service years as a CEO or as ED.
“There shall be a transitional period of 12 months from the effective date of the circular in respect of existing appointments and all CEOs and EDs who have served for 10 years shall cease to continue in such capacity, after the transition period of 12 months,” the circular stated.
NAICOM charged all the insurance and reinsurance companies to give consideration to the provisions of the circular in their future engagement of CEOs and EDs.
Presently, in the industry, not less than seven managing director/CEO of insurance companies in the country would be affected by the directive and may vacate their position before the end of the year, except a contrary directive that supersedes the former is issued.
