The National Insurance Commission has warned that it will recall the operating licence of any insurance firm that breaches its rules and guidelines.
The Commissioner for Insurance, NAICOM, Sunday Thomas, gave the warning in Abuja when he presented operating licences to six new insurance firms.
The firms are Heirs Insurance Limited (General); Stanbic IBTC Insurance Limited; Heirs Life Assurance Limited; Enterprise Life Assurance Company Nigeria Limited, FBS Reinsurance Limited, Cornerstone Takaful Insurance and Enterprise Life Assurance.
Nigeria’s business mogul and Chairman, United Bank for Africa Plc, Tony Elemelu, is the promoter of Heirs Insurance while FBS Reinsurance has former Commissioner for Insurance, Fola Daniel, as one of its promoters.
Speaking during the operating licence presentation ceremony, which held at NAICOM’s headquarters in Abuja, Thomas urged insurance promoters to play by insurance sector rules and regulations.
He said, “NAICOM is a regulatory and supervisory institution responsible for the insurance industry. As an operator, there are roles and responsibilities. One thing I want to make known is that companies don’t die, people kill companies and when companies die, the first port of call is the board of directors.
“Your responsibility as a company is to ensure that fit and proper persons manage the company. Know your limits when it comes to taking of risks. I want to encourage your boards that internal models must be adopted by your system in such a way that at every point, you match your risk capital with the level of capital required to drive the company.
“Corporate governance is very key, the role of the management and board of directors must be defined. You should avoid crossing borders that can disrupt the system.
“Over the years, we have noticed that most of the crisis in companies start from lack of proper understanding between the board and the management. We are issuing you a licence today but it does not belong to you. It is on lease but you will determine how long the lease period will be. I pray that you will not give the commission reason to recall the licence.
“The last licence that was issued for a re-insurance company was 35 years ago but I think the time has come. We as a commission, we are committed to deepening this market and we have noticed that most of the big ticket risks are still being shipped abroad. We will make sure that we retain as much as we can for the development of the economy.”
In his response, Elumelu assured working with NAICOM and other sector players to bring about the change that would help the industry grow so that the contribution to GDP would move to three per cent.
He said, “We have been in search of the licence over eight and half years. Today’s event is historic. To whom much is given, much is expected. We understand that insurance is a conservative sector; we understand issues of regulation, governance and risks.
“We are students in these areas. We will make sure that we abide by the standards. The area of regulations, we know that the issue of licence is dependent on regulations; we will try to uphold the highest standards of regulatory requirements.
“You have our full assurance. Market development, product—that is one of the things we will bring to the sector. We understand market research, we understand what consumers want, we know how to reach them and surpass their expectations and there is always room for improvement, especially with technology.”
Also speaking, Daniel assured NAICOM that his team was committed to deepening the Reinsurance segment of the market.
“We don’t have a reason not to be compliant; we will be self-regulative in a way that the commission will not suffer headache on account of the company. Thank you for giving us this opportunity to add value to the insurance industry particularly, capacity to the Reinsurance world,” he said.