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FG sued over unclaimed dividends as insurance stakeholders kick against proposed trust fund  

Insurance industry stakeholders have warned the federal government against getting involved in issues of unclaimed dividends in the capital market, arguing that such funds should be re-directed to affected firms for reinvestment.

They contended that the government, as regulators, had no business establishing a trust fund into which unclaimed dividends would be channeled because the majority of the key players are private entities.

To this end, some key players in the insurance industry have dragged the federal government to court over the issue.

There had been speculations back in April this year that that the federal government might have finally taken over the management of the Unclaimed Dividend Trust Fund after years of going forth and back on it, with the Securities and Exchange (SEC) admitting it now manages the Fund alongside the Debt Management Office, contrary to Nigerian shareholders’ position.

But the stakeholders made their position known at the Annual General Meeting of Veritas Kapital Assurance Plc, where shareholders were informed that payment of claims by the company was in the threshold of over N500m naira as at June 2022.

The stakeholders alleged that the government was mulling a trust fund, where it hoped to channel all dividends left unclaimed by investors.

They equally lamented the level of skepticism among citizens regarding insurance matters, insisting that it is one area where government should be more proactive, especially in strengthening enlightenment to help minimize risks associated with losses among the populace.

At the meeting which had all the directors and chairman re-elected, the company posted a profit after tax of N570,363million for the 2021 fiscal year which ended December 31st.

Commenting on the dividend claims, Patrick Ajudua, a shareholder with the company said: “I am the national chairman, New Dimension Shareholders Association of Nigeria; we talked about unclaimed dividends because it’s money meant for investors in the capital market and as such, government has no reason to lay claim to it by setting up a trust fund. That money doesn’t belong to them.

“We believe that unclaimed dividends, if not claimed should be sent back to the companies for reinvestment and a return back to the shareholders. So, government has no business claiming it, that money doesn’t belong to them.”

Also commenting on how insurance business in Nigeria can thrive, Ajudua said building trust is necessary to boost the sector.

“For insurance business in Nigeria, the first key thing is trust. Once trust can be guaranteed, the people know that if I pay premium my claims will be settled, I think people will patronize insurance business. Awareness should also be strengthened so that the people will know the benefits to them. Buildings have been collapsing in Nigeria; people die and there is no insurance to cover any losses arising from such an incident. Who is the ultimate loser? The regulators must ensure they create more awareness for insurance firms in Nigeria,” Ajudua said.

Earlier, MD/CEO of the insurance firm, Kenneth Egbaran, corroborated some of the shareholders’ claims, saying there is need for robust enlightenment campaign on the importance and benefits of insurance in the economy.

He stressed that while insurance companies continue to create awareness, the enforcement of insurance policies will help to deepen its penetration for national growth because insurance policies offer lots of benefits.

Chairman of the firm, Nahim Abe’ Ibraheem who got re-elected unopposed by the shareholders, explained that insurance firms are operating in a volatile economic environment, where most of the clients are left with options of either putting food on the table for their families or paying premiums.

The company, he said, hopes to navigate the insurance business with injection of contemporary technology to post a more impressive output in the current fiscal year.

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