Fact emerged recently that managing directors of some insurance firms have devised means of defrauding their institutions to the tune of millions of naira.
This, it was learnt is being done through inclusion of several ‘provisions’ in the book of account of the companies they represent. Here, it was gathered the money earmark under the provisions were meant to enrich the pockets of these chief executive officers. To avoid suspicion, they, in most cases, tie this money to corporate social responsibilities. These monies, investigation shows, were unaccounted for, and in most cases erased from the financial statement of the affected companies.
They also use the name of National Insurance Commission (Naicom) to perpetrate this act by stating that part of the provisions was meant for the regulatory body. To this end, the regulatory body had, on many occasions, denounce this false claim, appealing to shareholders and directors of the concerned insurance firms to always ask questions when such issues were raised. It even advised them to investigate properly when they come across such provisions in the companies’ accounts.
Mr Fola Daniel, commissioner for insurance recently said non of its staff were allowed to collect any form of unofficial money from underwriters and as such, such provision is illegal and uncalled for.
Some of these provisions, it was also learnt, are incorporated in the fees which they will charge companies they are underwriting for. And the unsuspecting publics comply and pay, but did not reflect in the financial accounts of the affected companies.
Before now, managers of underwriting firms had structured means of making money from their organization under the terms like  overriding commission, premium purchase etc which the supervisory body fought then and succeeded in minimising this act.
Managers as well as executives have various ways of defrauding their institutions which include; overstating revenues understating expenses, overstating the value of corporate assets or underreporting the existence of liabilities. In this case, managers and employees are pressured or willingly alter financial statements for the personal benefit of the indiviuals over the company.