Home Insurance Digest Why we are transiting to RBS—NAICOM

Why we are transiting to RBS—NAICOM

THE National Insurance Commission (NAICOM) says the insurance industry reform programmes such as International Financial Reporting Standards (IFRS), Code of Corporate Governance (CCG) and the Risk-Based Supervision(RBS) carried out by it are all globally induced and Nigeria’s insurance industry cannot afford to operate in isolation in the global financial sector.
Fielding question on why NAICOM has come with multi facet regulations for the sector, the Director of Supervision, Mr. Nicholas Opara, told journalists in Abeokuta, Ogun State, that the Commission cannot afford not to work in tandem with the global business demands, thus the need to key into the trend. Mr. Opara noted that the IFRS has recorded significant progress in companies’ financial reporting since its introduction in January 2015.
“I want to say that IFRS has recorded a lot of positives in our financial reporting. IFRS, RBS and other financial regulatory tools are globally driven. We belong to a world that is dynamic and we belong to this globe so we cannot be seen to be doing things differently. At any point in time we want to measure up to international best practice. We cannot continue to report on Generally Accepted Accounting Principles (GAAP), while other companies of the world have gone IFRS; neither shall we continue on Compliance-Based Regulation (CBR), when others have transited to Risk-Based Supervision.”
“It is not NAICOM that is actually imposing these regulation but we are meeting up with global requirement.”
He reminded the insurance companies that have not submitted their accounts that Insurance Act provides the deadline for submission,  adding, it requires insurance companies to submit their detailed accounts within six months after the end of each financial year, specifically not later than the June 30, the preceding year. And it goes further to provide that any company that fails to submit it will be liable to a fine of N5,000 for each day of non filing of returns. And that is so much that the Commission can go. Most of these companies that have not submitted their accounts, we compute their penalties and make them to pay.”
Continuing, Mr. Opara emphasized thus; “The law goes further to say, because of them, I have been confronted on this, that non submission of account is a ground for cancellation of license, but there is a gap in that provision, because the law does not tell us at what point we should give the company that has failed in the submission of its account. May be that gap will be filled as we are reviewing the insurance law. But for now, we penalize companies for not submitting their accounts immediately June 30th, he submitted.

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