By Patience Saghana
The National Insurance Commission, NAICOM is set to move againstÂ chief executive officers of insurance companies that operate broking or loss adjustingÂ firmsÂ while still in office NAICOM Director, (Inspectorate), Mr. SundayÂ Thomas, said in Ijebu-Ode Ogun Sate,Â â€œThis is unethical and it should not be encouraged. There are cases of chief executive officer of an underwriting firm having a broking firm, giving businesses to the company where he is CEO, yet there are issues of outstanding premiums.
This will soon be a thing of the past,â€
In a paper on titled, â€œCode of Ethics and Corporate Governance in the Insurance Industryâ€ delivered at the 2009 Annual Professionalsâ€™ Forum heldÂ last week, he noted that more often than not, the success of the managing directorâ€™s privately owned companies depend largely on at least 80 per cent of his time and energy, addingÂ this is clearly a case of conflict of interest and divided loyalty which he pointed out was out rightlyÂ unethical.
He said, â€œ That henceforth any managing director that must own a broking firm or loss adjusting firm would be compelled to disclose this to the board of directors of the company where he is CEO so that if there are issues of outstanding premiums arising from such broking firm, the board would be able to know the source of their problemâ€.
He said that unethical practices in the industryÂ include inadequate rating, withholding of premium/commission, claims falsification, deliberate creation of information gap between the management and board as well as falsification of returns to the regulator.
He said, by the time the Commission was through with the reform in the industry, all of these would belong to history books.
He said with nine months gone in the year, not up to half of insurance companies operating in the country have submitted their 2008 financial result to the Commission. â€œThis is because they find it convenient to pay the paltry fine of N5000 per day for as long as the result is delayed,â€ he said.
Under the current reform, he revealed, â€œthe fine would be made very stiff. He said it could as high as N100,000 per day and the deadline for filing the result could be made shorter. He therefore advise all operators to sit up so as not to be caught on the wrong side of the law.â€Â Earlier in his address, the Commissioner for Insurance, Mr. Fola Daniel, had warned operators that would continue to behave as if anything and everything is possible, that NAICOM would â€œdeal decisively with aberration and will also collaborate actively with other regulatory and security agencies to curb market misbehaviourâ€.