The National Insurance Commission (NAICOM), has been given approvals from the Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE) to allow underwriters submit their 2018 financial accounts by the end of April 2019, a month away from the mandatory deadline of March.
The Deputy Commissioner for Insurance, Technical, Mr Sunday Olorundare Thomas disclosed this in Lagos, according to him NAICOM has approached SEC and NSE to extend the submission, an effort that is taken to allow insurance companies tidy their accounts in line with the IFRS 9.
Mr Thomas stated that this step was taken by the commission to allow seamless migration from the IFRS 4 to IFRS 9, he further pointed out that the commission after issuing the IFRS 9 guidelines, met with the Chief Operating Officers of companies to educate them on the workings of the IFRS 9.
According to Thomas, the commission upon adopting the FIRS 9 guidelines had one-on-one engagements with the companies to ascertain their level of preparedness to adopting the new guidelines, stating that arrangements have been made by the commission to ensure the process is easy for the underwriters.
He said “we have reached out to the NSE and SEC to grant extension to insurance companies as regards submission of their 2018 financial results, and they have granted one month extension to insurance firms quoted on the NSE, operators need to do more to incorporate the tenets of FIRS 9 into their annual financial results.”
Thomas further explained that the IFRS 9 gives underwriters the needed information as it introduces a structured approach to the classification and measurement of financial assets, helping to effectively reflect the business model in which these assets are managed and their cash flow characteristics.
He also added that the guideline also provides more timely recognition of loan losses using a forward-looking expected credit loss model; with an enhanced hedge accounting model that better links the economics of risk management with its accounting treatment.
According to Barineka Thompson, the Director, Inspectorate, NAICOM, the new accounting guideline is an improvement on IFRS 4 that was in use, pointing out that the IFRS 9 introduces a new methodology for financial instruments classification amongst other benefits.