Decision unwarranted, ill timed, board insists
Crisis is brewing between the board of Standard Alliance Insurance Plc and the National Insurance Commission (NAICOM) over the cancellation of the firm’s certificate of registration as insurer.
The board and shareholders have gone to court to challenge the commission over the withdrawal of the certificate of operation at a time a standby investor had shown readiness to recapitalise the company.
The firm alleged that NAICOM was more interested in liquidation instead of recapitalisation. In a July 8, 2022 letter to the Minister of Finance, Budget and National Planning, Zainab Ahmed, the board had appealed against NAICOM’s intent to cancel the registration, stating that the move is unwarranted and untimely.
Copies of the letter were sent to the Commissioner for National Insurance and Chief of Staff to the President and Commander-In-Chief, Muhammadu Buhari.
The board chairman, Johnson Chukwu, explained that a reputable group of investors, Endura Investment Global Ltd., had planned to invest $ 8,000,000 in the company in the first instance, as part of efforts to meet NAICOM’s recapitalisation requirement.
He wondered why the commission applied the hammer at a time Standard Alliance was set to overcome its recapitalisation and operational challenges.
The chairman lamented that the company had been impacted negatively by a shortfall in capital due to the harsh operating environment and adverse impact of the COVID-19 pandemic.
Chukwu explained that the board had sent an appeal to the minister to protect the interest of policyholders and pensioners, who stand to lose their benefits.
He said the board was also concerned about the survival of the entity so that it can prevent job loss and loss of entitlements to key stakeholders.
Chukwu noted that the company has offices in major cities across the six geo-political zones and provides living income to 200 families, apart from their extended relatives.
He said the withdrawal of licence might send panic into the insurance industry and create a perception of instability in the sub-sector among members of the public.
Chukwu added: “We are disturbed that for the period our appeal was lodged with your office, an appeal that was also copied to NAICOM, and while we were still waiting for your responses, NAICOM did not at any time during this period deem it fit and necessary to invite us and the investors in respect of our appeal.”