The National Insurance Commission has said it will ban chief executive
officers of insurance firms who fail to submit their companies’ 2014 financial
accounts at end of the deadline given to them to do so from embarking on
foreign trips on the companies’ expenses and other capital expenditure.
The Deputy Commissioner, Finance and Administration, NAICOM, Mr. George
Onekhena, disclosed this in an interview
“Until we get their accounts, we will not allow the chief executive
officers to travel on foreign trips at the expense of the companies; we will
not allow capital expenditure and some other expenses without approval,” he
said.
The commission stated that the 2013 financial statements of insurance
companies revealed that only 36 firms out of 59 submitted their accounts at the
end of June 2014 deadline.
Onekhena said the law spelt out penalties for late submission of
accounts, adding that henceforth, the commission would be holding the chief
executive officers responsible for poor accountability and the inability of the
companies to pay dividend to their shareholders.
According to him, such lateness and inability to create wealth for
stakeholders expose poor governance in the insurance firms and NAICOM is
conducting a study on their activities and performances so as to know what is
wrong with the firms.
He said the commission was becoming more proactive in regulating the
firms and hoped to see more improvement, adding that about 12 companies had
already written undertakings to produce their 2014 accounts latest by April
this year.
Onekhena said the deadline for the insurance firms to submit their
accounts was June ending, but that those quoted on the Nigerian Stock Exchange
had March ending as their deadline.
He, however, explained that there could be some very practical reasons
why the companies might experience delay such as the change of accountant,
change in leadership and computer failure, among others.
“It is important to understand why some things happen before you take
action; but now, we are proactive, we are going to be monitoring them,” he
said.
The Commissioner for Insurance, Mr. Fola Daniel, said shareholders
should demand more accountability from the insurance companies.
“Shareholders should have a change of heart and live up to their
responsibilities by taking keen interest in what happens in the companies. It
is also imperative that the various shareholders’ associations look inwards and
purge themselves of fakes,” he said.
Daniel said shareholders should note that delegation of their
responsibilities to the boards and management of their companies should not
translate into abdication.
He observed that most of the shareholders were not asking questions on
how well their companies were being managed by their representatives.
According to him, beyond the annual general meetings, shareholders
should seek information and get satisfactory feedback from their boards and
management by engaging in intelligent and constructive interrogation of the
financial reports of the companies.
If they are not doing this as shareholders, it means they have no
interest in protecting their investments, according to the commissioner.
Daniel said that the main objective of every investor in a company was
to get return on his investment by way of dividend, capital appreciation, rise
in the price of stock and bonus issue.
He said the best managers of business were the owners, because they were
better focused on achieving set goals and objectives.
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