Three months to the December deadline given to insurance companies whose managing director/CEO had spent 10 years in such a role to resign, no fewer than nine firms have commenced the process of naming a successor.
No fewer than nine insurance companies have commenced succession plans to replace their current managing directors/CEOs latest by 31st of December, 2023.
The outgoing CEOs have spent 10 years or more managing their firms which is the maximum number of years stipulated by the National Insurance Commission(NAICOM) for an MD to spend in a company.
NAICOM had in a circular number: NAICOM/DPR/CIR/45/2022, sent to all insurers and reinsurers on Tuesday, 22nd of November,2022, set 10 years tenure limit for the managing directors/CEOs and executive directors(EDs) of insurance and reinsurance companies in the country, adding that, this development would become effective from 1st of January, 2023 even as it gave a 12 months grace that ends on 31st of December, 2023.
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Initially, there were forces working against this directive by persuading NAICOM to shift ground, however, the regulatory body is adamant on its stand. Realizing this, the concerned underwriters have now braced up to meet the December deadline that is just three months away from now.
The affected CEOs include: Dr. Fatai Kayode Lawal is presently the Managing Director/CEO of Sterling Assurance Nigeria Limited; the group managing director/CEO of Consolidated Hallmark Insurance(CHI) Plc, Mr. Eddie Efekoha; Mr. Tope Smart who is the managing director of NEM Insurance Plc and Mrs. Cecilia Osipitan. the managing director/CEO of Great Nigeria Insurance (GNI).
Others include; Mr. Tunde Hassan-Odukale, the managing director/CEO of Leadway Assurance Company Limited; Mr. Femi Asenuga, managing director/CEO of Mutual Benefits Assurance Plc; Biyi Otegbeye of Regency Alliance Insurance; Bola Odukale of Capital Express Assurance and immediate past group managing director/CEO of Cornerstone Insurance Plc who has now been replaced by Mr. Stephen Alangbo, after his retirement and in a move to meet the tenure limit regulatory deadline.
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To this end, investigation revealed that the affected underwriters have commenced succession plans by either seeking fresh recruitment or elevating the in-house executive directors to the position of managing directors.
While some of the affected insurers are at the closing stage of their recruitment process, others were at the elementary stage but the hopeful process would be concluded before the deadline.
Confirming this development, at a press conference after the end of the maiden edition of NIA Chairman Time Out With CEOs, in Victoria Island, Lagos over the weekend, the chairman of the Nigerian Insurers Association(NIA), Mr. Segun Omosehin, disclosed that, all the concerned insurers have commenced the process of choosing their next managing directors, assuring that all its concerned members will meet the deadline.
“Our members are in tune with the NAICOM regulations on tenure limits and the insurance companies involved are working ahead to meet the deadline. So, we are optimistic with the level of planning we have seen in those firms so far, that they will meet the deadline. We don’t have issues with it as long as those taking over are qualified to manage those firms, “ he said.
Earlier, the commissioner for insurance/CEO, NAICOM, Mr. Sunday Thomas had, at a NAICOM Seminar organised for Insurance Journalists, in Uyo, Akwa-Ibom State said the regulatory body will not shift its December deadline, urging operators that have yet to fine-tune their operations in line with the tenure limit, to do so or face sanction post-deadline.
He said the tenure limit was necessary to inject fresh blood into the system, rejiggle operations and evolve innovative products and services that are in tune with latest development and evolving risks, all of which will manifest with new personnel taking managerial charge in the insurance industry.
Saying succession plan is critical to survival of every business, insurance inclusive, he said, the tenure limit will ensure underwriters put in place adequate corporate governance structure and plans that will ensure that the companies continue to grow irrespective of who leaves the board or the management.
While the policy implies that upon exceeding the maximum tenure as ED or CEO in a particular insurance or reinsurance company, such ED or CEO can still take up full term position as such in another insurance or reinsurance company, market observers believe this will lead to increased competition within the insurance business market given the unavoidable cross-pollination of managerial patterns, skills, and strategies as between Insurance and reinsurance companies within the country by retiring EDs and CEOs who take up similar positions in other Insurance companies.
Earlier, NAICOM had said, it is exercising its powers under the National Insurance Commission(NAICOM) Act 1997 and in line with the Nigerian code of Corporate Governance 2018, said, the maximum tenure for executive directors of insurance and reinsurance companies operating in Nigeria, is needed to sanitize the industry and ensure the sector continues to operate with international best practices.
According to NAICOM, “CEOs and other EDs shall serve a maximum tenure of 10 years, comprising of terms of 5 years each, subject to single approval of the commission; the tenure for an ED who becomes a CEO in the same company shall serve a cumulative tenure not exceeding 15 years and where an ED changes portfolio by moving to another position of ED equivalent within the same company, the period spent in previous position will count for the purpose of determining maximum tenures.”
The circular, signed by the director, Policy and Regulation, L.M Abah, added that, where an insurance company is a product of merger, acquisition, takeover or any other combination, the 10-year period shall include the pre and post combination service years as CEO or as ED.
“There shall be transitional period of 12 months from the effective date of this circular in respect of existing appointments; all CEOs and EDs who have served for 10 years shall cease to continue in such capacity, after the transition period of 12 months; henceforth, all insurers/reinsurers shall give consideration to the provisions of the circular in their future engagement of CEOs and EDs and the circular takes effect from 1st of January, 2023,” the regulator pointed out.