The Securities and Exchange Commission is now more strong-minded to entrench sanity in the capital market and has vowed to deal with insurance companies that misuses funds that were raised from the capital market.
The Acting Director-General of SEC, Mr. Mounir Gwarzo, said it will enforce the initiative in partnership with the National Insurance Commission (NAICOM).
The SEC took the position just as the Deputy Commissioner of Insurance, Technical, NAICOM, Mr. Muhammad Kari, disclosed that agency was investigating some insurance companies for using funds raised from the capital market for purposes other than that for which the funds were raised.
According to Kari, it is important for SEC to be involved in such cases as it is the main regulator of the Nigerian capital market with the responsibility of protecting investors.
Gwarzo therefore suggested closer cooperation between both regulatory bodies to ensure erring persons or institutions are swiftly brought to book.
Collaboration between the two institutions currently happens within the framework of the Financial Services Regulation Coordinating Committee.
Gwarzo also said the collaboration could be even stronger and more result-oriented if the two regulatory bodies were to set up an inter-agency committee for speedy resolution of the issues.
He said, “The FSRCC was established to facilitate collaboration across the entire financial system. But beyond that platform, we need to create an inter-agency committee involving specific contact persons between our two institutions who will strengthen the synergy between our respective areas of oversight.”
Kari explained that NAICOM had taken bold steps to build a strong and vibrant insurance industry in Nigeria.
This, he said, included the insurance industry recapitalisation exercise of 2005 in which the SEC played a prominent role.
The recapitalisation, he added, led to significant consolidation in the sector with the number of players shrinking from over 100 to 57 stronger insurance services providers.
Kari stressed that NAICOM needed the continuous support of the SEC in its bid to further develop and regulate the Nigerian insurance industry.
Gwarzo assured NAICOM of its full support in resolving all outstanding issues regarding to infractions, stressing that the country’s financial markets would be better off with stronger institutions.
By Yemisi Izuora