- About 9 insurance companies’ chief executive officers will have to leave their posts by the end of this year
- This is due to NAICOM’s 10-year tenure limit
- The new policy will not only affect CEOs, it will also affect some executive directors in the insurance industry
The managing directors and executive directors of some insurance companies will have to leave their positions by December 31, 2023.
This is due 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 executive board positions in insurance companies in Nigeria.
Recall that the Central Bank of Nigeria (CBN) also issued a simialr directive for top executives in the banking industry.
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.
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.
NAICOM’s directive 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 Newspaper, 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.
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.
Insurance companies 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.
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.