OPENING REMARKS BY THE Ag. COMMISSIONER FOR INSURANCE, NATIONAL INSURANCE COMMISSION (NAICOM) Mr. O. S. THOMAS AT THE CONFERENCE FOR DIRECTORS OF INSURANCE COMPANIES HELD AT ORIENTAL HOTEL, LAGOS ON WEDNESDAY, AUGUST 28, 2019.
It gives me great pleasure to join the President of the Chartered Insurance Institute of Nigeria (CIIN) to warmly welcome you to this Conference meant to promote better understanding and appreciation of the insurance industry in Nigeria and the roles and responsibilities of members of Boards of Directors.
The number of Directors in attendance demonstrates the level of importance attached to our continued and combined efforts to reposition the Nigerian Insurance Industry.
In order to ensure adequate understanding and build capacity amongst the stakeholders, the commission did resolve to conduct series of programs for all its stakeholders. This engagement therefore, is amongst such programs earmarked by the Commission to keep the Directors abreast of the workings of the sector being one of its critical stakeholders.
This one-day conference is expected to go a very long way in redefining the future of insurance and repositioning it for self-actualization in terms of growth and development. I urge you to pay keen attention to the presentations that may throw up issues some of which may have hindered the desired growth of your companies.
In the course of this program I have been informed that erudite scholars who are subject experts will be speaking on various aspects of insurance operations in Nigeria relative to its potential. The subject of corporate governance will also be extensively discussed during the session.
In the last few years, the insurance industry has witnessed series of changes owing to reforms embarked upon by NAICOM. These reforms include financial reporting, No Premium, No Cover, Corporate Governance Code, Risk Based Supervision, Information and Communication Technology advancement, Financial Inclusion, Claims Settlement, Market Conduct, Expansion of Distribution Channels, Recapitalization with all aimed at building confidence, trust and enhancing our market value and profitability.
The Commission shall continue to introduce new reforms and initiatives in line with international best practices in our march towards achieving the full potentials of the industry.
The Insurance in Nigeria with a contribution to the nation’s GDP at less than 1% has underperformed its potential especially when compared with other sectors in the financial services industry.
I believe that once we can successfully navigate this corner, we could be on our way to entrenching a financially solid, vibrant, viable and active insurance market that would bring about not only an increase in penetration but a substantial increase in the industry’s contribution to GDP. The will also simulate accumulation of long-term funds for infrastructural financing, job creation, and an improved Return on Investment.
It is long overdue that we make changes in the right direction. Successful economies are characterized by a strong investment culture of which the insurance industry plays a vital role. So we literally need to re-energize the insurance industry and commence playing our key roles in boosting and growing the sector.
The position of the Board of Directors is key in achieving a high level of efficiency in an institution corporate governance structure. It is for this purpose that the theme for this workshop “Corporate Governance: The Panacea for Sustainable Growth and Development of Insurance Business in Nigeria” has been carefully chosen as a wakeup call for board directors.
The low level of effectiveness of corporate governance oversights in the insurance sector remains one of the major regulatory concern to the Commission. This is for the simple fact that the failure of corporate governance in the year’s past, have played a prominent role in the death or distress of most corporate organizations the world over, Nigeria inclusive.
Over the years, the Commission has made attempts at entrenching good corporate governance culture in the insurance sector. The development and issuance of Corporate Governance Code in 2009 and the Market conduct guidelines in 2014 are among efforts of the Commission in this direction.
Let me state here for emphasis that the primary role of the Board either in a private or public entity remains the oversight of management to ensure the corporate goals, vision, mission and values of the entity are strictly upheld at all time.
The board is also expected to ensure the financial soundness and general wellbeing of the organisation by monitoring the management, to guarantee effective and efficient deployment of human and capital resources in the overall benefit of all stakeholders. The observance of this role has been lacking in some of our companies and which has contributed in no small measure to the challenges facing these companies today.
It is our firm believe that members of the board can effectively perform their roles without necessarily interfering in management functions
It is the desire of the Commission to work with all stakeholders including Members of the board of directors to reverse this trend.
it is imperative for me to remind us here that your companies are in the business of insurance primarily to settle genuine claims made by policyholders. In all policy formulations of the board I am appealing that the prompt settlement of claims be given a high priority.
In concluding my remarks, the recapitalization exercise is on and the reports submitted by the companies on their recapitalization plans has been good, I can only encourage sustained efforts at earlier completion of the plans. Meanwhile the Commission is engaging other relevant regulatory bodies and agencies of government for possible palliatives that will reduce the cost of recapitalization and the response is looking good.
I have no doubt that at the end of the day, we will be going back home with a better understanding of the insurance sector, our roles as directors and the benefits that will result from effective performance of our roles.
I thank you for your attention and hereby declare the conference open.
O. S. Thomas
Ag. Commissioner for Insurance