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AIICO Insurance Litigation Costs hit N4bn in Q3

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AIICO Insurance Plc, the largest insurer by premium income in Africa’s most populous nation, had 31 outstanding cases at the end of the interim period 30 September 2022 with a total claim of  N4 billion.

However, the Directors, having sought legal opinion, are of the view that the Company stands a good chance on those cases and hence do not foresee those cases having any material effect on the Company’s results and financial position.

Therefore, no provisions have been made in the financial statements.

MoneyCentral calculations raise concerns because the N4 billion contingent liabilities is 65.23 percent of the insurer’s profit after tax, but the amount is not material to cast a doubt over the going concern of the entity.

Some time ago, AIICO Insurance Plc (“the Company” or “AIICO” or “the Claimant”) filed a suit against Megamound Investment Limited and Indemnity Finance Limited (“the defendants”) for the recovery of its outstanding loan plus interest of N1.4  billion.

Although the defendant, via a letter dated 9 Nov 2007 allocated 1.5 hectares of land (1.089 hectare, if the portion allocated for common areas is considered) at Lekki County Estate to the Company, it never effected a transfer. The Claimant sought and obtained a judgement of the court in terms of the loan.

The Court, via a judgement dated 30 May 2014, ordered that the defendants execute and deliver to the Claimant the property in respect of the 1.5 hectares of land at Lekki County Home Estate, excluding  the area marked for provision of common services.

The Court further ordered that possession should be granted to the Claimant of the 1.5 hectares of land at Lekki County homes Estate, excluding the areas marked for the provision of common services measuring 4,108.5 square metres.

AIICO commenced execution of this judgment on 6 January 2022. However, when AIICO sought to take over the property, the management of Lekki County Estate obstructed AIICO from taking possession of the allocated land and also harassed and assaulted its staff. Consequently,

AIICO has not recognized this land in its books but has hereby made disclosure of its existence while filing requisite actions including Contempt of Court proceedings against the  management of Lekki County Estate.

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