The acting Commissioner for the National Insurance Commission (NAICOM), Sunday Thomas has advised Boards of Directors of insurance firms to ensure sound management of the companies without interfering in the activities of management.
This directive, according to him, is to promote the smooth running of insurance businesses.
Why this matters: Thomas noted that the failure of the board to effectively monitor management in order to ensure financial soundness and general well being of their organization is one of the numerous challenges faced by Insurance firms today.
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He said his desire was to stop the trend from continuing and promised that the commission would address it.
“It is our firm belief that members of the board can effectively perform their roles without necessarily interfering in management functions. The desire of the commission is to work with all stakeholders including members of the board of directors to reverse this trend.”
He made these observations during the second edition of the conference for directors of insurance companies, with the theme, ‘Corporate governance: The panacea for sustainable growth and development of insurance business in Nigeria,’ in Lagos on Tuesday.
More Details: He went further to highlight the importance of the board of directors in the running of companies which is to oversee the deployment of resources for the benefit of stakeholders.
“The board is also expected to ensure the financial soundness and general wellbeing of the organisation by monitoring the management, to guarantee effective and efficient deployment of human and capital resources in the overall benefit of all stakeholders,” he noted.
He added that the commission would not tolerate any action of delayed claims payment or default of genuine claims by the insurance companies.
“It is imperative for me to remind us here that your companies are in the business of insurance primarily to settle genuine claims made by policyholders. In all policy formulations of the board, I am appealing that the prompt settlement of claims be given a high priority. The commission will view seriously any case of late or non-payment of genuine claims.”