The affected firms also risk stiffer sanction from the National Insurance Commission (NAICOM) with few days to the commission’s June 30th deadline for the submission of their results. This is in line with the Insurance Act 2003.
According to a reliable industry source, the affected firms are to pay the NSE N62.3 million for late submission of their 2017 annual reports and accounts.
Some of the insurance companies that were affected, THISDAY learnt included Mutual Benefits Assurance Plc, Great Nigeria Insurance, Niger Insurance, African Alliance Insurance Plc, and Sovereign Trust.
The Deputy Commissioner for Insurance (Technical), NAICOM, Mr. Sunday Thomas, in response to enquiries from THISDAY, disclosed that as of June 20th, 41 insurance firms out of 58 firms had submitted their 2017 financial results to the commission.
He said out of this, the commission had approved the report of 32 firms while 10 were at various stages of approval.
Thomas said there was no going back by the commission in the enforcement of penalty for late submission, stressing that there would not be an extension of the deadline for submission of their results.
According to Thomas, for now, 17 firms were yet to submit their results.
Going by the laws of the sector, if the firms fail to submit their results on or before June 30th, they would be liable to a daily fine of N5,000 until the day they submit their reports.
But NAICOM is of the view that the fine should be reviewed upward and has been pushing for the amendment of the Insurance Act in that regard.
For some years now, insurance firms have been falling victim of the regulators’ punitive fines, a situation which had caused uproar among their shareholders.
In fact, some shareholders had alleged that their returns on investments were being diverted to payment of fines to regulators instead of paying dividends to their investors.
So far, Universal Insurance Company has paid the highest fine of N51.4 million to SEC for late returns in 2016.
THISDAY learnt that some insurance firms had not submitted even their 2015 annual accounts and have been paying to NAICOM N5,000 punitive fines every day.
Since the adoption of the International Financial Reporting Standards (IFRS) by the industry, insurance firms unlike banks have been battling to get it right each year, a situation which has been delaying their submission of their reports and holding of their annual general meetings.
This is despite the fact that the regulator has on several occasions organised training programmes for auditors and account officers of operating firms while some firms have spent much on training their employees abroad for the purpose of getting it right.
According to NAICOM in a statement titled, “Status of 2017 financial statements of insurance companies as at April 19, 2018,” the companies whose accounts have been approved are Continental Reinsurance Plc, Custodian Life Assurance, Custodian and Allied Insurance, FBN General Insurance Limited, FBNLife Insurance, AXA Mansard Plc and Regency Alliance Insurance.
Others are Law Union & Rock Insurance Plc, Wapic Insurance Plc, NEM Insurance, LASACO Assurance Plc, Prestige Assurance, Consolidated Hallmark Plc, Ensure Insurance Plc, AIICO Insurance, Guinea Insurance, Wapic Life Insurance Plc and Leadway Assurance.
Among the 14 firms whose reports were withheld by the commission, one is at the stage of its response to query still under review, while two other firms’ results were under supervisory review.
Also, three companies’ results were queried while the reports of four firms were placed under review. Another four set of firms have their reports placed under supervisory review by the commission.
The commission recently said the decision to impose sanctions on defaulting companies became necessary because their action deprived the regulators, policy holders, insurance intermediaries, analysts and other stakeholders of the relevant information about their performance and financial results.