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Business > Insurance
A&G Insurance wins round-one, as court stops suspension by Finance NAICOM
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By Nkechi Naeche
August 16, 2012 18:15:16pm GMT      |      Views: 394
NAICOM building

WorldStage Newsonline-- Justice Patricia Ajoku of the Federal High Court, Lagos has restrained the Finance Minister, Dr. Ngozi Okonjo-Iweala and her ministry from either approving the removal of directors and management of Alliance & General Insurance or ratifying the appointment of new directors and management to assume control over the company.

According to a statement, the court also restrained the National Insurance Commission (NAICOM) from proceeding with planned sack of the current management of the insurance company.

The judge, in a ruling on an ex parte application filed by Alliance & General Insurance, also restrained NAICOM from implementing a directive suspending the insurance company from transacting business in Nigeria for the next six months with effect from August 6, 2012.

The judge, after entertaining argument from counsel to the plaintiff (Alliance and General Insurance Plc), Ayodele Akintunde, specifically barred NAICOM from either sacking the management of the plaintiff company or appointing new directors to assume control and management of the company.

Justice Ajoku ordered NAICOM to remove forthwith from its website, information regarding the suspension of the plaintiff from transacting insurance business in Nigeria for the next six months, as well as further publishing same in the national newspapers.

The orders, according to Justice Ajoku, are to remain in force pending the determination of a motion on notice filed by the plaintiff against the respondents, which include NAICOM, Ministry of Finance, Minister of Finance and the Attorney General of the Federation, Bello Adoke (SAN).

The judge however, ordered the plaintiff to sign an undertaking to pay damages to the respondents should it later turn out that the orders ought not to have been granted.

The court also granted leave to the plaintiff to serve some of the respondents outside jurisdiction with the process filed in the matter and fixed august 22, 2012 for hearing, while also ordering that hearing notices should be served on all the respondents.

Akintunde had, while arguing the motion, told Justice Ajoku that the faith of Alliance & General Insurance would be jeopardized should the respondents not be restrained from going ahead with the implementation of the suspension directive.

He said NAICOM was acting on a ‘devastating’ recommendation of the Financial Reporting Council of Nigeria on the state of finance of Alliance & General Insurance, which alleged that the company had failed to comply with best accounting practice in its dealings.

Akintunde said while his client had already filed a suit to challenge the said recommendation of the Financial Reporting council of Nigeria on its books, NAICOM in furtherance of the recommendation, suspended Alliance & General Insurance from transacting business in Nigeria for the next six months.

It would be recalled that NAICOM, last week monday suspended Alliance and General Insurance Company Ltd, A&G Life Assurance Plc and Fidelity Bond Insurance Brokers from transacting further insurance business for a period of six months with effect from August 6, 2012.

The suspension is as a result of the failure by the respective companies to comply with relevant provisions of the National Insurance Commission Act 1997 and the Insurance Act 2003.

Specifically, the offences of the companies include non-rendition of accounts; misrepresentation and non-disclosure of liabilities; non-remittance of premiums and commissions, and corporate governance abuses.

The Commission, in the exercise of the powers conferred on it by the enabling laws also states that the suspension order may further be extended at the end of six (6) months until such a period when the Commission is satisfied that:The violation of the provisions of the National Insurance Commission Act 1997 and the Insurance Act 2003 has been addressed, the method of transacting business is no longer hazardous to the policyholders and potential clients.

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