The Nigerian Exchange (NGX) recently imposed fines totaling N74 million on five insurance companies for failing to submit their financial reports on time. This action underscores the NGX’s commitment to transparency and investor protection, enforced through the X-Compliance Report, a mechanism designed to ensure listed companies adhere to regulatory obligations. The timely filing of financial statements is crucial for maintaining market integrity and providing investors with the necessary information to make informed decisions. The NGX’s proactive approach to penalizing defaulters serves as a deterrent and reinforces the importance of compliance with regulatory guidelines.
Lasaco Assurance, Regency Alliance Insurance, Guinea Insurance Plc, Universal Insurance Plc, and African Alliance Insurance Plc were the companies cited for non-compliance. Lasaco Assurance incurred an N8.7 million fine for late submission of its 2023 Annual Financial Statement (AFS), while Regency Alliance Insurance Plc received a N7.8 million penalty for the same offense. Guinea Insurance and Universal Insurance were fined N3.4 million and N2.8 million, respectively, for similar delays. Universal Insurance faced an additional N3 million penalty for the late filing of its first-quarter 2024 unaudited financial statement. These fines reflect the varying degrees of tardiness and underscore the NGX’s graduated penalty system based on the severity of the infraction.
African Alliance Insurance Company faced the most significant penalty, a hefty N48.6 million fine, for the delayed submission of its 2022 annual report, a report that revealed serious financial instability within the company. This substantial fine highlights the gravity of the delay and the potential impact on investor confidence. The company’s failure to file its annual report for over a year raised serious concerns about its financial health and its ability to meet its obligations. The delayed 2022 report was the last financial statement the company filed, further compounding concerns about its operational viability.
The National Insurance Commission (NAICOM), the regulatory body overseeing the insurance sector, took decisive action in response to African Alliance’s financial struggles and its failure to meet its obligations, particularly to annuitants. NAICOM dismissed the company’s board and management and appointed an interim team to steer the company back to stability and protect the interests of policyholders. This intervention underscores the regulatory body’s commitment to safeguarding the interests of policyholders and ensuring the stability of the insurance sector. The appointment of a new leadership team signifies a concerted effort to address the company’s financial woes and restore confidence in its operations.
The newly appointed interim board includes Dr. Haruna Mustapha as chairman, Mr. Jacob Erhabor as MD/CEO, Mr. Wasiu Amao as Executive Director (Technical), Ms. Oremeyi Longe as Executive Director (Finance), Mr. Anthony Achebe as Non-Executive Director, and Halimatu M. Khabeeb as Non-Executive Director. This team is tasked with stabilizing the company, addressing outstanding claims, and developing a sustainable turnaround plan. Their expertise and experience are crucial for navigating the challenges facing African Alliance and ensuring its long-term viability.
The 2022 annual report filed by African Alliance revealed a precarious financial position, with a negative insurance solvency margin of N4.04 billion and a deficit of N29.8 billion in total admissible assets less net insurance and investment contract liabilities. This dire financial situation raised serious concerns about the company’s ability to continue as a going concern. The directors acknowledged the severity of the situation and outlined measures to address the solvency issues and restore profitability. However, the subsequent intervention by NAICOM suggests that these measures were insufficient to address the company’s deep-seated financial problems. The fines levied by the NGX and the intervention by NAICOM underscore the importance of timely financial reporting and regulatory compliance in maintaining a healthy and transparent insurance sector. These actions serve as a reminder to all listed companies of their obligations to investors and the broader market.
