Corporate governance code still to come for insurance industry

Insurance industry may still have to prepare for the National Insurance Commission’s (NAICOM’s) corporate governance code, particularly on tenure of CEO and executive directors after it has been resisted severally with series of arguments.

The failure of the Code of Corporate Governance Code earlier promoted by Financial Reporting Council (FRC), which consumed its former executive secretary, is about to resurface with that of NAICOM.

NAICOM commissioner said recently that as part of this resolve, the Commission is about to expose the draft of the revised Code of Corporate Governance to all stakeholders. “Not only have we always resisted change as an industry, we have actually fought against it, sometimes with silly arguments of being different or requiring more time to do what other sectors have achieved overnight, Mohammed Kari, insurance commissioner said.

But NAICOM is hinging its position the need to achieve transparency, efficiency and best global practice that could place the local industry side-by-side with its counterparts in developed economies.

Sunday Thomas, who is the current deputy commissioner for Insurance, Technical, while as director general, Nigerian Insurers Association (NIA) said operators are not against implementation of corporate governance in the industry, but have raised issues about the suddenness of enforcement.

“What we have asked for, from NAICOM is time to enable companies go through the hurdle of changing their directors, where the law applies, and we are hoping they will listen to our plea”.

It may not be a straight jacket postponement of enforcement, but allow time for specific company cases, Thomas said while serving the NIA as director general.

Thomas though stated that operators are not in loggerhead with the regulator over enforcement, but that NAICOM should consider the operating environment in the Nigerian insurance sector.

Joe Irukwu, a professor and insurance icon who wrote forward on existing corporate governance code had said the present leadership of NAICOM has embarked on some positive steps in order to promote the quality and efficiency of the insurance industry, for the benefit of insurance consumers and the national economy, and one of them is the Principles on Corporate Governance.

“Undoubtedly, if its principles are enforced, we will certainly have a first class insurance industry that would be as good as any of the best in the insurance world.”

It sets out and recommends various structures and control systems, designed to ensure efficiency and accountability by both the board and management of insurance companies as well as measures that will eliminate fraudulent and self serving practices among members of staff, the management and boards of insurance institutions, in line with modern trends, Irukwu stated.

NAICOM had enforced code of corporate governance code with respect to non-executive directors, and this has been compiled by the industry. Specifically, section 5.04 (vii) of the 2009 corporate governance code which states that “non-executive directors shall not be re-nominated and appointed for more than three terms of three years, which saw exist of over 150 non-executive directors in the industry.