By Amin Kef Sesay
A Consortium of Civil Society Organizations on Social & Economic Justice said to be a Coalition of Civil Society and Media Organizations in an Open Letter written to President Julius Maada Bio stated how it wants to draw the President’s attention to the continued and sustained fraudulent insurance practices in the country and the willful refusal of the Sierra Leone Insurance Commission(SLICOM) to exercise its statutory roles as regulator in addressing issues which have resulted in fraudulent mismanagement of Life Assurance Funds of over 22,000 Civil Servants in Sierra Leone including the Army, Police, Teachers, Nurses etc.
According to the Consortium, upon receipt of complaints with relevant supporting documents on certain fraudulent insurance practices and willful disregard to various provisions of The Insurance Act of Sierra Leone 2016, they wrote to the International Insurance Company SL Limited for clarification and explanations to guide their actions, but lamentably have not received any valid explanation or documents to suggest otherwise.
Stated also was that the Consortium further engaged the Sierra Leone Insurance Commission (SLICOM) in September 2021 with the quantum of evidences available to them to substantiate their claims and for appropriate action to save the country’s insurance industry and protect innocent Policy holders.
Highlighting the issues affecting the International Insurance Company SL which were presented to SLICOM the consortium members were also stated in the Open Letter as: The Managing Director approving a Loan of 200,000 USD to himself without Board Approval despite the clear loan prohibition clause in Section 60 Sub Section 1-3 of the Insurance Act of SL 2016.
Quoting the Insurance Act Section 60 Sub Section 3: “ Where any event occurs giving rise to circumstances the existence of which at the time of the grant of any subsisting loan would have made such grant a contravention of this section, such loan shall, notwithstanding any contract to the contrary, be repaid within three months from the occurrence of such event; and in case of a default, the Director, Managing Director, General Manager or Principal Officer by whatever name called shall, without prejudice to any other penalty which he may incur, cease to hold office with the insurer granting the loan on the expiry of the three months (The loan repayments lasted more than three years)
That the Managing Director took part of the loan from Life Assurance Bank Account in violation of Section 36 Sub Section 4C which states “The life insurance fund shall– (c) not be applied directly or indirectly for any purpose other than that of life insurance business referred to in subsection”
According to the consortium, the said Managing Director’s Loan was not reported or disclosed in the Company Financial statements for two consecutive years.
It further stated that the said Company produced two set of Audited Financial Statements in the same year, one to the Regulator and the other to the public.
That the company failed to make provisions for Life Assurance Actuarial Valuation Report disclosing a deficit valuation of Le 2.4 billion Leones, in the financial statement since 2013. Section 37 Sub Section 1-3. Sub (3) states:“ An insurer shall maintain, with respect to the life insurance business–a general reserves fund, which shall be credited with an amount equal to the net liabilities on policies in force at the time of the actuarial valuation.”
Failure to give details of Management expenses as required by IAS 1 to conceal the monumental expenses of the Managing Director
Treating Life Assurance Premium as income from where they are charging Management and Operating Expenses, thus entrenching gross understatement of Life Assurance Fund and defrauding over 22,000 Sierra Leoneans who are policyholders to the Company.
The Company failed to submit Financial Statement to SLICOM as required by Insurance Act in Section 41 sub-section 1-2 of the Insurance Act. The consortium stated that unfortunately, SLICOM did not sanction the company but proudly mentioned same in its Annual Report.
A host of other shortfalls were mentioned by the consortium who disclosed that they engaged SLICOM with appropriate evidences to substantiate their claims including a sample of Financial Statement of Insurance Company from Nigeria for their reference but bemoaned that SLICOM has refused to act appropriately to protect the Insurance Sector thus failing to provide effective supervision to the Insurance Industry.
Members of the Consortium made a humble appeal to President Bio for his intervention in order to clear the Industry of those corrupt practices and ensure the enforcement of good corporate governance.
The members believe that with his intervention such will result in a vibrant and growing industry that will meet the basic requirements in supporting local and foreign direct investments in the country.
They also expressed the belief that holding all Insurance Companies accountable in totality for all Life Assurance Premium will encourage profitable insurance investments for adequate returns to cover their operating expenses and accrued interest just like the Banks. Such, they are sure, will in turn stimulate economic growth, while preserving Life Funds for the benefit of the Insurance Policy Holders and their named beneficiaries.
Copies of the letter were sent to the Speaker of Parliament, Leader of Government Business SLPP, Leader of APC MPs in Parliament, Leaders of NGC MPs in Parliament, Leader of C4C MPs in Parliament, Chief Justice of the Republic of Sierra Leone, President of SLAJ, President of Bar Association, Minister of Finance, the Press among others.
