Kelvin Egerue
24 July 2007
opinion
Lagos — The ding-dong affair which has continued to characterize the long concluded recapitalization of insurance institutions in the country maintained its rating last week with the disclosure that not all the 71 companies earlier pre-qualifies as having complied with the recapitalization requirements will eventually make it to the last line.
Shocking as this revelation might sound, this seem to be the official position. Already, many of the insurance managers who have hints of what is about to come are said to have mounted vigil at the Abuja corporate headquarters of the National Insurance Commission (NAICOM) with the view to establishing their real status.
Only last week, the NAICOM's high command directed the Central Bank of Nigeria (CBN) to commence the refund of the money deposited by insurance firms.
It was with the move to enforce this directive that the NAICOM was said to have requested insurance firms to forward their bank account numbers to the CBN for the purpose of crediting them with the funds hitherto held in the escrow account.
It was however said last week that not all the companies would get their deposits back. It was rumoured that only those recertified by the commission will benefit from the pay back deal.
The emerging problem for the band of 71 life and non-life companies earlier cleared by the commission stem from the alleged irregularities in the deposits made CBN.
Investigations conducted by the Champion Insurance revealed that the number of insurance companies which purportedly made deposit at the CBN is in no way tallying with the volume of money found in the vault of the apex bank.
It would be recalled that part of the problems associated with the delays in the release of the recapitalization proceeds kept in an escrow account with the CBN has to do with the verification of the various companies which laid claims to having made the deposit.
The NAICOM had consequent upon its resolve to protect the interests of the investing public directed the insurance firms which engaged in the recapitalization exercise must deposit the proceeds of the fund raise in an established account with the CBN from where the commission would cause its release there after.
The total of 43 non-life insurance firms, two reinsurers and 26 life companies were granted provisional licenses on the basis that they had shown evidence of mobilizing the minimum paid up share capital.
But the frictions and intrigues which trailed the tail end of the recapitalization exercise leading to the federal government's setting up of probe panel culminated in the setting up of a committee to review the claims made by insurance firms in respect to their recapitalization status.
But the acting commissioner for insurance Mallam Muhammed B. Hussaini said last week that the NAICOM's verification team has been able to pin down a total of 36 companies as making the deposit with the CBN. This, by implication means that the quantum of companies to be eventually awarded with the final license might fall short of the earlier 71.
Mallam Hussaini who confirmed renewed efforts by the insurance commission to ensure the release of the seemingly trapped recapitalization proceeds had disclosed that the authorities of the Securities and Exchange Commission ( SEC ) has cleared the allotment of the shares of 16 insurance firms which approached the public for fund raising.
Yet, the insurance managers warned last week of any move to embarrass companies which duly complied with the recapitalization rules and requirements.
According to some of the managers many of who would not want their names in print, it is the responsibility of the commission to invite companies which recapitalization status are in doubt for clarifications and explanations ahead of any publication of the final list of successful companies.
"Many of us complied as directed. Those who complied submitted evidence of either the payment or the instructions to our bankers to transfer the money to the CBN. If for any reason such money could not be traced to the particular company or there are any such doubts, the companies involved must be invited for questioning. The recapitalization thing was not meant to punish companies but to help them grow. So, why will any person be interested in drilling us to the point of frustration ", one of the managers had remarked.
Yet, the acting commissioner for insurance who was a courtesy visit to Champion Newspapers Limited last week declared that all is well with the insurance industry in Nigeria.
However, the apparent inability of insurance companies in the country to have access to the well over N200 billion starched away in an escrow account with the Central Bank of Nigeria (CBN) is said to be impinging on the capacity of the insurance sub sector to properly harness the benefits of the recent recapitalisation and consolidation programmes.
It has been alleged that it was the under currents of the recapitalisastion exercise which culminated in the removal of chief O.E. Chukwulozie as the commissioner for insurance that has worked against the release of the money five months after the end of the exercise.
Yet, Mallam Hussaini said that NAICOM has concluding its " cross breeding" exercise with the CBN pointing out that the commission can now match insurance companies with the funds been held with the apex bank, a development which he described as the prelude to the eventual release of the funds.
"The main concern of NAICOM is in repositioning the Nigerian insurance industry in the minds of the insuring public. We would achieve this through the articulation of proactive policies. The whole essence of the recapitalization exercise was to check against charlatans", Mallam Hussaini submitted.
He gave hints of the insurance commission's plans to beef up its human resource base, a project which he said has received the approval of its board of directors. NAICOM he explained is soon to employ more staff as to be able to contend with the challenges of post recapitalization.
"NAICOM is soon to embark on the total computerization of its work processes. We are going to be on-line, real time instant data capturing system. We intend to have a server domiciled at NAICOM to which all firms must link to such extent that every policy issued must have an identity from NAICOM," he had boasted.
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