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Chuks Udo Okonta
The National Insurance Commission (NAICOM) is presently reviewing the outcome of the regulatory order slammed on Industrial and General Insurance (IGI) Plc, the Commissioner for Insurance, Mohammed Kari, has said.
He told Inspenonline in an interview that the commission’s intervention helped reduced the overhead of the company, adding that all observations would be handled effectively reposition the firm.
“The order on IGI has just expired and we are reviewing the result to see how much we have been able to achieve by the order. We have found out that the order has saved the company hundreds of millions of Naira.
“Because of the restrictions on expenditure, and lack of board meetings, which has been substituted by approvals by the commission, they were able to make some good savings. I think one quarter of their management expenses reduced,” he said.
Kari noted that the order exposed the bloated corporate structure of the company, stressing that there were directors who have been on the firm’s board since it commenced operations over 20 years ago.
“There was this indication that showed that the corporate structure of the company was not properly focused. The company had 50 non executive directors and executive directors, percentage wise. As a company that could not pay claims, why should it have such a huge number of directors? There were directors who have been there since the company started over 20 years ago. Such can bring instability either in the management or board. We hope that now that the order had expired, the company should be able to stand on its feet,” he said.
Recall that NAICOM ordered the management of the firm to appoint a reputable auditing firm to conduct a comprehensive review of the company’ s accounting system; capital verification and financial position.
A regulatory order mandated the management of IGI to appoint any one of these three auditing firms – KPMG; PWC and Delloitte to undertake the financial review
The company was also mandated not to incur any expenditure in excess of N250, 000.00 without the prior approval of NAICOM. It was asked not to carry out new investment or dispose any of its assets without the prior approval of NAICOM and should make a monthly report of its activities to NAICOM effective from August 2015.
The regulatory order reads: “Consequent upon examination and investigation of the activities of Industrial and General Insurance Company Limited, (IGI) and in the exercise of the powers conferred on it by the enabling laws, the National Insurance Commission (NAICOM)hereby issue this regulatory order and directs that IGI shall:
1. Within two weeks from the date of this regulatory order appoint any one of the under listed auditing firm to conduct a comprehensive financial review of the company and submit the report to the commission: KPMG, PWC and Delloitte.
2. Mandate the auditing firm to, among others,
A. Undertake a comprehensive review of your company’s accounting system
B. Conduct capital verification and
C. Verify the financial position of the company as at 31st July, 2015.
3. Not incur any expenditure in excess of N250, 000.00 without the prior approval of NAICOM
4. Not carry out new investment or dispose any of its assets without the prior approval of NAICOM
5. Make a monthly report of its activities to NAICOM effective from August 2015
“This regulatory order takes effect from 3rd August, 2015 and is for a period of six months. The regulatory order may be extended until such period when the commission is satisfied that here is full compliance with the provision of the National Insurance Commission Act 1997 and the Insurance Act 2003 and the method of transacting business is such that your policyholders and potential policyholders are adequately protected.