Six Insurance Companies- NICON Insurance Limited, A &G Insurance Plc, A & G Life, Goldlink Insurance Plc, Spring Life Assurance and Investment & Allied Insurance Plc risk the revocation of their operating licences for their persistent failure to submit mandatory quarterly returns to the Insurance regulator, National Insurance Commission.
Based on the updated list released on NAICOM website, the six insurance companies failed to submit their 2015 First, Second and Third Quarter Returns as at October, 31, 2015 in contravention of the NAICOM Circular No. NAICOM/CFIO/TECH/RTRNS/2015 dated 27th March 2015 and the 2003 Insurance Act.
As specified in the Insurance Act 2003, “Failure to render quarterly returns shall be a condition for cancellation of operating licence under Section 8 of the Insurance Act, 2003”
Analysts are worried that NICON insurance and A & G who have persistently failed to submit their Quarterly Returns for 2013, 2014 and now 2015 might have no further sympathy from the Insurance regular since the major intent of the Returns is to ascertain the solvency status of insurance institutions. The quarterly returns are expected to include: statement of premium transaction by class of business, statement of commission by class of business, statement of claims by class of business, statement of management expenses, quarterly balance sheet, revenue account, profit and loss account.
In January 2015, the former Commisssioner for Insurance, Mr Fola Daniel had explained that in accordance with extant laws, all insurers and reinsurers are required to, within 30 days from the end of each quarter, file financial returns as at the end of the quarter with the Commission, adding that failure by any company to meet this requirement constitutes a ground for cancellation of the insurer’s license in line with section 8 of the Insurance Act 2003.
The 2003 Insurance Act outlined Penalties as follows:
a) Late filing of quarterly returns shall attract a fine of N5, 000 per day for each day of default.
b) Failure to render quarterly returns shall be a condition for cancellation of operating licence under section 8 of the Insurance Act, 2003.
c) An insurer shall be deemed to have failed to render quarterly returns if such returns are not submitted to the Commission on or before the end of the next quarter.
If and when NAICOM would apply the law to the letter is what is uncertain.
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