OPENING REMARKS BY THE Ag. COMMISSIONER FOR INSURANCE, NATIONAL INSURANCE COMMISSION (NAICOM) Mr. O. S. THOMAS AT THE 2nd EDITION OF THE CONFERENCE FOR DIRECTORS OF INSURANCE COMPANIES HELD AT ORIENTAL HOTEL, LAGOS ON TUESDAY, OCTOBER 15, 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 build capacity of the stakeholders, the Commission resolved to conduct series of programs for all its stakeholders. This engagement therefore, is one of such programs earmarked by the Commission to keep members of the Board of Directorsabreast of the workings of the sector being one of its critical stakeholders.
This one-day conference is also expected to stimulate discussions that will redefine the future of the Nigeria insurance industry and reposition it for growth and development. I urge you to pay keen attention to the presentations that are expected to throw up issues for discussion.
I have been informed that erudite scholars who are subject experts will be speaking on various aspects of knowledge that affects insurance operations in Nigeria. 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 following reforms embarked upon by NAICOM. These reforms include financial reporting standard, No PremiumNo Cover, Corporate Governance Code, Risk Based Supervisionframework, Financial Inclusion, Claims Settlement, Market Conduct, Expansion of Distribution Channels, Recapitalizationetc. All these initiatives are aimed at building confidence, trust and enhancing our market value and profitability.
The Commission shall continue to introduce new reforms and initiatives in the march towards achieving the full potential of the industry.
The Insurance sector 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. This will also simulate accumulation of long-term funds for infrastructural financing, job creation, and an improved Return on Investment.
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 program“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 well being 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
The desire of the Commission is 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. The Commission will view seriously any case of late or non payment of genuine claims
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 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.
Distinguish audience, I have no doubt that at the end of this program 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 these roles.
I thank you for your attention and hereby declare the conference open.
O. S. Thomas
Ag. Commissioner for Insurance