NICON takeover: NAICOM hinges decision on stakeholders’ interest

Sunday Ojeme

Following the suspension of the boards of NICON Insurance Plc and that of Nigeria Reinsurance Corporation, the National Insurance Commission said on Saturday that the decision was taken in the interest of stakeholders.
The Head of the Corporate Affairs unit of the regulatory agency, Mr. Mike Umeh, said in a statement that the action was intended to protect all stakeholders especially the policyholders, who continued to petition the NAICOM for non-settlement of genuine claims, which also affected some government parastatals.
“To ensure equity, all such petitions were referred to NICON Insurance for response. Regrettably, most of these enquiries were either not responded to or received late with evasive responses,” he said.
He said the commission also discovered that the respective chief executive officers of life and general businesses in the oganisations were mere paper executives that could only approve payments of up to N50,000 while payments above this amount were the exclusive preserve of the group managing director, thereby rendering the CEOs ineffective and incapable of taking decisions on prompt claims payment which is the principal objective of taking an insurance policy.
He said o Investments, the NAICOM also confirmed information regarding movements of investment in a manner not consistent with the Insurance Act.
According to him, “By a letter conveying the instructions of the Group Managing Director, all monies realised by NICON Insurance and Nigeria Reinsurance Corporation in excess of that immediately required for salaries and other management expenses, were domiciled with a company registered as NICON Investment Company Limited. This company is solely owned by the Group Managing Director and cheques for such accounts domiciled with him.”
He said in respect of Nigeria Re, evidences of a cowed management abound with instructions dished out and compliance compelled, saying that this was certainly against the norms and dictum of good corporate governance and established practice in an insurance institution.
He said, “The board of directors is the highest decision making organ of any corporate organisation and should have the freedom to arrive at relevant decisions. It may be noted that the Federal Government still has substantial equity in the two organisations under reference. In the case of NICON Insurance Corporation, not less than 30 per cent and in the case of Nigeria-Re, not less than 70 per cent. It is therefore unacceptable to allow these institutions to be run unethically with very disturbing consequences on policyholders, investors, the insurance industry and the economy at large.”