The responsibility of directors of insurance companies in adhering to corporate governance is key to achieving sustainable growth and development of the business.
Over the years, attempts at entrenching good corporate governance culture in the sector has not yielded the desired result, despite the enactment of the Corporate Governance Code in 2009 and the Market Conduct Guidelines in 2014 by the National Insurance Commission (NAICOM).
The primary role of the boards, 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.
The board is also expected to ensure the financial soundness and well-being of the organisation by monitoring the management, to guarantee effective and efficient deployment of human and capital resources in the benefit of stakeholders.
The observance of this role has been lacking in some of firms, a development, which has contributed to the challenges of these firms.
Rather than perform their roles without interfering in management, the boards abuse the system, by engaging in malpractices and or misconduct without minding the impact on the company. Many times, such firms, become insolvent and unable to meet the primary obligation of claims payment.
To solve the problem, NAICOM brought together chairmen and chairpersons, managing directors, directors, non-executive directors and executive directors to promote better understanding and appreciation of the industry and their roles and responsibilities at capacity building conference with the theme, “Corporate governance: The panacea for sustainable growth and development of insurance business in Nigeria”.
At the event, the directors said they were aware of the importance of re-positioning the industry, promising to reverse the trend.
Acting Commissioner for Insurance, Mr. Olorundare Sunday Thomas said: ‘’It is imperative for me to remind us 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. The commission will view seriously any case of late or non-payment of genuine claims.
‘’The recapitalization is on and the reports submitted by the companies on their recapitalisation plans have been good, I can only encourage sustained efforts at early 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 this programme, we will be going back home with a better understanding of the sector, our roles as directors and the benefits that will result from effective performance of these roles.’’
Thomas said the low level of effectiveness of corporate governance oversights in the 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 past has played a prominent role in the death or distress of most corporate organisations the world over, Nigeria inclusive,’’ he said.
He stated that the desire of the Commission is to work with stakeholders, including directors to reverse this trend.
He said: “It is imperative to remind you 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. The Commission will view seriously any case of late or non-payment of genuine claims,” he added.
The Chairman, FBNInsurance Limited, Mrs Aderele Kehinde, said the programme was informative.
She said she initially felt it was not necessary, but was happy that she attended because she found value in it.
She said: “I have seen a lot of value in attending the conference. There are some things many of us didn’t know or put to mind at a point but reemphasizing our responsibilities makes us conscious of the importance of our positions and the responsibility expected of you.
Leadway Assurance Chairman Gen Martin Luther Agwai (rtd), said: “I am glad that I came because I was not into insurance or finance before coming into the industry. I enjoyed the fact that the discussion was brought to those of us who are learning gradually in the field and I have found a very useful day and I am leaving a happy person.
“The fact that I know that if something goes wrong while I am the chairman, I can be dragged back to the company by law even when I retire from the company is something that I find enlightening. I know that it is another risky business. But I believe what any director or chairman should be doing is to take calculative risk and he or she will not have any problem.”
KBL Insurance Director, Mr Simpson Eimiakhena, also said he had listened to experiences not just from the regulator but practitioners. It was very well-intended and the knowledge that was given was good.
“The conference is like a sensitization forum, where directors get to know their responsibility and is not just knowing their responsibility, but to appreciate it and to be able to put the right structure and framework in place. In everything that we do, there is element of risk. but we must be able to mitigate those risk. so it is not just that you are liable or responsible for decisions taken or not, but it is about the fact that as a director, you must be responsible to do the right things. And if you do the right thing I don’t think you have anything to fear.
“We were told in one of the discussions, it was very clear that you must have good fate. In other words, there must be adequate disclosure in anything that you are involved in. It doesn’t stop any transaction but let it be known that you are involved and part of it. Follow the procedure and processing. So for me, I think it was good,” he said.
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