NICON Insurance has failed to meet its financial commitments to Federal Government since 2007/2008.
A Federal High Court sitting in Abuja has awarded the Federal Inland Revenue Service, FIRS, more than N200 million judgment debts against NICON Insurance and the National Insurance Commission, NAICOM.
The FIRS had, through a Writ of Summons by Idrissa Kogo of its Legal and Prosecution Department, supported by a 33-paragraph affidavit, deposed by Omofoyewa Laide, claimed the sum of N99.92million against the two firms being balance of its entitlements under its Staff Welfare Insurance Scheme with NICON Insurance owned largely by Jimoh Ibrahim. Mr. Ibrahim has been having various problems with his businesses including his grounded airline, Air Nigeria, and his news magazine, Newswatch.
Also, FIRS sought for N100 million as general damages against the defendants for wrongfully holding onto the Service’s N99.92 million, despite repeated demands.
Justice Adeniyi Ademola, who gave the ruling, also granted the FIRS 10 percent interest on the principal sum for the period from February 2008 to date, and 60 percent interest on the post-judgment sum until it is liquidated.
Both NICON Insurance and NICOM are to pay additional N50,000 each as cost.
PREMIUM TIMES gathered that the dispute between FIRS and NICON Insurance arose when the former noted the inability of the latter to meet its financial commitments to Federal Government since 2007/2008.
The revenue agency had told the court that when the scheme began in 1997, it paid the sum of N10 million to NICON from staff entitlements and benefits as mortgage for the benefit of its contributing workforce, adding that over the years, its contribution grew to about N220 million.
According to the Service, at an account reconciliation meeting on February 27, 2008 about N155.42million was established as NICON’s indebtedness.
In line with an agreed repayment schedule, it was gathered that NICON paid about N23 million in March 2008 as the first installment; followed by another N15million in May that year, while between 2008 and December 2010, a total of N17.5million was paid, leaving a balance of N99.92million, which it refused to settle, resulting in the suit.
At the hearing in the case, FIRS counsel, an Assistant Director in the Legal and Prosecution Department, James Binang, told the court that by a Group Policy Number 2003038, the revenue agency had entrusted its staff contributions into the hands of NICON insurance, but was disappointed that their savings were not released to them when they needed it.
He said the FIRS had tried since then to enforce its rights under the said Group Welfare Insurance Policy Number 2003038, but NICON denied that it ever knew anything about its claim, and challenged the jurisdiction of the court to entertain and determine the suit.
NICOM, which is charged with the legal responsibility to monitor and regulate operations in the insurance sector in Nigeria, urged the court to dismiss the suit on grounds that there was no cause of action and that it was wrongly joined in the matter.
In its statement of defence filed by its counsel, Ijeoma Nwankwo, NICON claimed that FIRS suit was time-barred as the cause of action arose since May 19, 2010, against the provisions of Section 26(1) of the NICON Act Cap N54 Laws of the Federation of Nigeria, 2004, which stipulate that a suit must be instituted within 12 months.
Ms. Nwankwo maintained that NICON usually receives insurance premium cover before the issuance of insurance policy, adding that the FIRS never paid as and when due any premium towards any type of insurance cover, including any staff insurance welfare scheme, or the insurance of any policy.