- No fewer than nine insurance companies' executives will have to vacate their positions by the end of this year
- This development follows a notice of a 10-year tenure limit as instructed by the industry's regulator, NAICOM
- The new policy will not only affect CEOs but some executive directors are expected to face the same fate
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At least nine insurance firms have initiated succession strategies aimed at appointing new managing directors and chief executive directors no later than December 31, 2023.
This move comes in response to the directive issued by the National Insurance Commission (NAICOM), which imposes a tenure limit of a maximum of 10 years for individuals serving in these leadership roles.
In a circular, identified as NAICOM/DPR/CIR/45/2022, distributed to all insurance and reinsurance companies on November 22, 2022, the NAICOM introduced a ten-year tenure limit for both managing directors/CEOs and executive directors (EDs) of insurance and reinsurance companies operating within the country.
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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.
Consequently, the current CEOs are anticipated to step down from their positions in compliance with this regulatory requirement.
Policy becomes fully effective in January 2024
The implementation of this policy adjustment is slated to commence on January 1, 2024. In order to ensure a seamless transition, NAICOM had last year, provided a twelve-month grace period, which will conclude on December 31, 2023.
According to Leadership, the CEOs affected by this development are as follows:
- Dr. Fatai Kayode Lawal, who currently serves as the Managing Director/CEO of Sterling Assurance Nigeria Limited;
- Mr. Eddie Efekoha, the Group Managing Director/CEO of Consolidated Hallmark Insurance (CHI) Plc;
- Mr. Tope Smart, holding the position of Managing Director at NEM Insurance Plc;
- Mrs. Cecilia Osipitan, the Managing Director/CEO of Great Nigeria Insurance (GNI).
- Mr. Tunde Hassan-Odukale, the Managing Director/CEO of Leadway Assurance Company Limited;
- Mr. Femi Asenuga, who holds the role of Managing Director/CEO at Mutual Benefits Assurance Plc;
- Biyi Otegbeye, associated with Regency Alliance Insurance;
- Bola Odukale, who is part of Capital Express Assurance; and
- Ganiyu Musa, the former Group Managing Director/CEO of Cornerstone Insurance Plc. who has now retired and has been replaced by Mr. Stephen Alangbo.
Asides from the listed CEO, Legit.ng understands that about 15 Executive Directors would equally be affected by the policy.
The circular had also noted that the 10-year period would take into account the service years of the CEO or Executive Director in instance the company has gone through a merger, takeover, acquisition or any other combination.
In pursuit of this objective, an inquiry has unveiled that the impacted underwriters have initiated succession strategies.
These strategies encompass both the pursuit of new talent through recruitment efforts and the promotion of internal executive directors to assume the role of managing directors.
While a portion of the impacted insurance companies is nearing the final stages of their recruitment procedures, others were still in the initial stages.
However, it is anticipated that all these processes will be completed before the deadline.
Insurers expected to comply before deadline
Stakeholders in the Insurance industry have come to accept NAICOM's directive on tenure limit for Executive Directors and CEOs as the right way to go.
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Olumide Soaga, manager at Zenith General Insurance Company Limited told Legit.ng that before the deadline, the affected insurance and reinsurance companies are expected to have complied to NAICOM's directive.
NAICOM is the industry's regulator and I want to believe that the directive is for the best. Change is the only constant thing.
Hopefully, before the deadline, the companies would have effected the change and found replacements for the affected executive directors and CEOs.
Significantly, the affected insurers are only a small fraction of the total number of insurance companies in Nigeria. So, this shouldn't be a problem.
NAICOM names 67 insurance companies licensed to operate in Nigeria
Meanwhile, Legit.ng earlier reported that the most recent data from NAICOM reveals that the number of insurance companies holding operational licenses in Nigeria has increased to 67, up from the previous count of 54.
It's worth noting that SICL Reinsurance Brokers Limited (SICL RE), a subsidiary of Standard Insurance Consultants Limited (SICL), has joined the ranks of companies authorized to provide Reinsurance Brokerage services in Nigeria.
As per the latest report by NAICOM, the composition of these insurance firms includes 13 dedicated Life insurers, 27 General insurers, and 12 Composite insurers.
Additionally, the industry encompasses 3 reinsurers, 4 Takaful operators, and 8 micro insurance companies.