Nigerian Insurers Association (NIA), the umbrella body of all insurance companies operating in the country, has been advised to make it mandatory for its member companies to submit their financial report within three months after the end of each operating year.

The delayed or non publication of financial reports and holding of annual general meetings are the thorny issues facing investors in insurance firms.

Ladipo Ajayi, managing director, Lasaco Assurance Plc, who gave this charge during the 2008 Insurance Future Summit in Abuja recently, stated that the NIA could make its own regulation that would require its member companies to submit their report within three months or face some sanctions.

The Insurance Act of 2003 gave insurance companies up to June 31 of the following year to submit their end of year returns to the National Insurance Commission (NAICOM).

Investigations, however, show that only about three companies have filed their returns for 2007 with NAICOM as at the time of writing this report.

While it is true that corporate and financial planning is an important aspect of every business, this is clearly lacking in the nation's insurance industry due to lack of relevant data and late submission of returns and accounts by the operators.

Experts also say performance record is an essential element to planning and prospecting, pointing out that late submission of annual returns after the end of an accounting year makes it difficult to make positive projections for the insurance industry.

The shareholders in insurance companies have always complained about late conduct of Annual General Meetings by companies in the industry; as such meetings come sometimes almost one year after the end of an accounting year.

Section 26 (1) of Insurance Act provides that "An insurer shall not later than 30th June of each year submit in writing to the Commission the following-

(a) a balance sheet duly audited showing the financial position of the Insurance business of the insurer and its subsidiaries at the close of that year together with a copy of the relevant profit and loss account which the insurer is to present to its shareholders at its annual general meeting;

(b) a revenue account applicable to each class of insurance business for which the insurer is required to keep separate account of receipts and payment; and Statement of

Accounts, etc.

(c) a statement of investments representing the insurance funds.

As a penalty, any insurer which fails, neglects or refuses to file the returns and accounts under this section commits an offence and is liable on conviction to a fine of N5,000 per day for each day of default.

Researchers from Afrinvest West Africa Limited expressed their discomfort with the late submission of insurance company's annual audited accounts, which according to them hinders reliable forecast on the companies and the industry at large.

It was stated that unlike the banks where investors buy their stocks as result of proper knowledge of the record performance, most investors are ignorantly buying insurance stocks based on market speculation. The research noted that this would only be for a short period as wise investors in the near future would not compromise data and statistics to take decisions on any investment, and hopes that insurance companies begin to appear more transparent.

Oluwadare Thomas, director, Inspectorate, NAICOM, said that the late filling of returns by companies remains a challenge as far as the law is concerned.