IMF decries insurers’ poor accounting, auditing practices

° Says NAICOM’s supervisors spend more time verifying data than analysing them

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Chuks Udo Okonta

The International Monetary Fund (IMF) has said supervisors from the National Insurance Commission (NAICOM) spend more time verifying data than analysing them due to poor accounting and auditing of Insurance companies’ financials.

The IMF said this in a report entitled: Nigeria: Publication of Financial Sector Assessment Program Documentation – Detailed Assessment of Observance of Insurance Core Principles, stating this challenge not only hinder effective supervision, but also timely disclosure of information to policyholders and the market in general.

The organisation urged NAICOM to collaborate with the Financial Regulator Council (FRC) to improve the reliability of audited financial statements, so that supervisors would be able to focus more on both quantitative analysis and qualitative aspects of supervision.

To promote proper governance, it urged NAICOM to to take insurers and directors to task for submitting inaccurate information.

Determined to address the identified issue and other associated challenges, NAICOM said it is building a robust data Warehouse, a platform for interconnecting all industry stakeholders to support real time aggregation of data on policies at the time of underwriting and policy issuance.

The Insurance Policy System, it was learnt is a digital platform that has been designed to capture all insurance policies issued in Nigeria with a unique identifier. The portal will generate a unique identifier for every policy issued by insurance companies and enable insurance customers and third party entities such as Law Enforcement Agencies to query and validate their insurance policies.

It was gathered that the anticipated digital platform will essentially capture all insurance policies issued in Nigeria; generate a unique policy identification number for all issued policies necessary to ensure fidelity and validity of all policies in the country; obtain and manages information on all insurance policies, and premiums sold by insurers, brokers and agents.

The platform would also provides information on policies to members of the public and provides management information to NAICOM regarding summary and/or details of all policies by company, broker, and agents; ensures proper accountability of all premium returns by insurance companies; captures all businesses done by every broker through the underwriter and ensure proper accountability of all insurance levies received from brokers.

More so, it would provide easy access to data regarding policies issued, to support analysis and policy based decision making; provides a means for members of the public to validate the Insurance Policy issued by the appropriate Insurance stakeholder; allows Law Enforcement personnel to verify any insurance instrument tendered to them in the course of performing their function and enable NAICOM to monitor the claims payment process.

According to the Deputy Director, Information Technology, NAICOM, Abiodun Aribike, the Commission uses an Electronic Document Management System to store and manage electronic documents and keep images of paper documents in a secure location, adding that NAICOM has a workflow system built into it. “This software helps the Commission control and manage access to important official documents, maintain restricted access to confidential documents, reduces the time and efforts taken to locate documents, reduce loss of documents and provide safe storage and backup of all documents in a secure location or library,” he said.

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