He replaces Mr Sam Njoroge who left the services of the Company after a successfully one-year period of stewardship. .

Mr Folayan is a seasoned insurance practitioner with a Bsc in Insurance from the University of Lagos, Nigeria and an MBA from the University of Ilorin, Kwara State, Nigeria. He is a Fellow of the Chartered Insurance Institute, London (since 1993); Fellow of the Chartered Insurance Institute, Nigeria (since 2002) and member of other professional bodies and associations. He is an insurance professional with analytical skills and entrepreneurial drive. His impactful and function-relevant capability for leadership is grounded in his vast knowledge of the West African insurance industry as well as his rich experience in Life and Non-life insurance.

He has over 28 years experience in the insurance world, starting with Sakiina Insurance Brokers, Nigeria in 1983. He eventually rose in the insurance profession to become Acting Managing Director of Elmac Assurance (Nigeria) Limited, a composite Insurance company in 2001 and later Managing Director of the same organisation in July 2002.

His experience cuts across all aspects of Life Insurance and Non-Life insurance practice including, underwriting, claims, special risks (oil and gas) etc.

NIC Board Vice Chairman, Dr. Martin Aliker, said: “The appointment of Mr. Folayan as Ag. Managing Director of NIC is aimed at moving the company to the next stage of our plan to consolidate our industry leadership as the preferred insurer in Uganda.

“The Board is confident that with his deep knowledge of the African market, his vast experience (particularly in the area of oil and gas) and his professional track record over the years, he will passionately drive NIC’s vision of being the number one provider of insurance, risk management and financial services not only in Uganda but in the entire East African region.”

– End –

For further information, please contact:

Josephine O. Aguma

Head, Corporate Communications

Office: +256 312 258 002

Mobile: +256 772 825 263, Email: jomunyidde@nic.co.ug

KAMPALA – 2^9th September 2011

National Insurance Corporation Limited is optimistic about its growth prospects after taking significant steps to resolve the dispute with Makerere University over the Deposit Administration Plan scheme (Muk DAP), NIC Chairman Remi Olowude said yesterday.

Mr Olowude was speaking during NIC’s 10^th Annual General Meeting in Kampala where he presented shareholders with the company’s Annual Report and Financial Statement for the year ended December 31, 2010.

The Corporation’s profit for the year was Shs2.023 billion, which the company is proposing to plough back as retained earnings.

“I am delighted to report that your company has remained on the growth trajectory,” Mr Olowude told shareholders. “Major strides recorded in the year under review include the enhancement of the efficiency of your company’s business processes to guarantee greater performance and profitability.”

NIC has sustained its enviable reputation of prompt settlement of claims. Last year it paid the Uganda Police Force Shs8.2 billion for a helicopter that crashed on March 8, 2011 in Bugiri, Eastern Uganda. NIC also paid Shs10 billion to beneficiaries of the Makerere DAP scheme, as agreed with the Government of Uganda, pending final valuation of the Fund balance by an independent Actuary.

“The final settlement of the MUK DAP claims is being worked out and it is hoped that all the outstanding issues relating to the MUK DAP will be satisfactorily resolved,” Mr Olowude said. “It is important to mention that so far, NIC has paid Shs15.7 billion to MUK DAP beneficiaries whilst only Shs13.2 billion was received as contribution throughout the Programme life.”

He added: “So far, NIC has demonstrated the principle of utmost good faith in the handling of every matter material to the MUK DAP. I have no doubt that NIC will emerge from the present situation stronger than ever, thus vindicating the company.”

NIC HIGHLIGHTS OF THE YEAR ENDING DECEMBER 31, 2010

Gross premium income was Shs9.023 billion, while Investment income rose by 15.4 percent from Shs1.345 billion in 2009 to Shs1.554 billion in 2010.

Underwriting results, before management expenses, stood at Shs4.729 billion, despite 30 percent drop in gross premium income, on the back of a sound underwriting policy.

Total claims payments rose 315 percent to Shs10.864 billion, showing proof of company’s financial strength. Settlements included a Non-life Insurance claim of Shs8.2 billion for a helicopter loss by the Ugandan Police, which was the biggest claim payment in the industry during the review period.

Funds and reserves for long term insurance business rose 68 percent to Shs1.008 billion, despite a 66 percent drop in gross premium income.

The total assets of the company grew by 10 percent to Shs73.325 billion in 2010 from Shs66.551 billion in 2009. Of particular note was the capital appreciation of the investment properties, which rose by Shs5.74 billion to Shs36.425billion, a 19 percent increase from 2009, which amounts to an increase of 19 percent.

Total equity of the company also increased to Shs21.007 billion in 2010, representing an increase of 5 percent.

NIC remains official insurer of the Ugandan senior national football team, The Cranes, as it provided insurance coverage for the Federation of Ugandan Football Associations (FUFA).

NIC also retained its unrivalled dominance of the game of Female Netball in the East African region in 2010, as the company’s Netball team retained the Regional championship trophy for the year.

The Auditor General’s report on the face-off between Makerere University and the National Insurance Corporation (NIC) is creating more problems than it was meant to solve. Records confirmed by an audit exercise carried out by the Auditor General have shown that NIC received a total of Shs13.226 billion from Makerere University and has so far paid Shs15.7 billion. Yet, the Auditor General, based on the findings of an audit company, has computed a total of Shs.26.9billion as being payable to Makerere by NIC, less Shs213 million withdrawal charges and Shs10billion paid by NIC between December 2010 and January 2011. NIC does not agree that an additional sum of Shs16.7 billion is due to be paid to Makerere University as recommended by the Auditor General.

What is most interesting in the whole saga is the fact that a third party – the Auditor General – that was invited by government to reconcile and verify the contentious figures has declared that the calculations of both Makerere and NIC were wrong. The new figures released by government appeared to have muddled up facts beyond the imagination of the two parties. Something is not quite right here. Whilst the Auditor General’s report has availed Makerere what would amount to a Christmas bonus, it has also burdened NIC with an unanticipated debt.

Makerere University Academic Staff Association (MUASA) has sought to force the issue by laying down tools and insisting that it is paid not just what it previously claimed, but what the audit now claims it is owed, with immediate effect.

Our relative silence on this matter should not be considered an admission of this liability but should be understood as our professional commitment to dialogue and respect for contracts. We believe that it is fair for us to receive a fair hearing.

NIC, as a responsible corporation, has met its obligations, paying Makerere staff withdrawals in form of death and retirement benefits on behalf of the Makerere Board of Trustees since inception of the Deposit Administration Scheme (DAP). Shs5.7 billion has so far been paid out in such withdrawals while another Shs10 billion was paid to the university within two months, based on the President’s intervention.

Not only does this reflect our financial strength, it also shows our good faith and commitment to resolve this matter amicably. Let us, for a moment, ignore the shrill noises around the matter and look at the facts. How can a simple commercial transaction, guided by agreed terms of contract, suddenly become a knot that has become too difficult to untie?

The key to unravelling the truth can be found in the answer to a simple question: if a pension contributor stopped remittances to its fund scheme in 2005 and consistently made withdrawals from the same fund for over six years, what is the basis for saying that the value of the fund is more than 100 percent of its original size?

In other words, how could Makerere’s fund, which was less than Shs13.2 billion when the university stopped remitting contributions to NIC in 2005, have grown to Shs32.6 billion by August 2010, in spite of withdrawals?

This, we feel, is a legitimate question that needs to be answered between the interested parties, without unfair and undue pressure.

Whilst the government has done well to mediate in the dispute between Makerere and NIC, We believe it is necessary to go one step further to ensure that there is ‘no victor, or vanquished’ in this matter.

In effect, Makerere must get neither a shilling more nor a shilling less than what is due to it and NIC must not inadvertently be run out of business. Both are national institutions that must be preserved for the good of society.

NIC is ready and willing to be heard thorough, fair, satisfactory and binding resolution to this matter. We are confident that we shall be vindicated by the truth. All we seek is a fair hearing, and a sober, impartial examination of the facts. Is this an unreasonable request?

Investors, financial analysts and other stock market operators are returning to the drawing boards to reappraise investment decisions, following the readmission of the National Insurance Corporation (NIC) by the Uganda Securities Exchange (USE), which, on July 15 suspended the company from trading its shares on the bourse.

Stock market watchers are optimistic that the resumption of trading in NIC shares will significantly boost activities on the floor of the stock exchange, especially in the insurance sector as investors and market speculators still consider NIC’s equities a good buy. This will also be a major boost for public confidence in the insurance industry in Uganda.

NIC’s consistent good performance since its partial privatisation to IGI Plc in 2005 and its full privatisation in 2010 and consequent listing on the bourse have accounted for the goodwill that the Corporation continues to enjoy among the investing public.

Its stock was the toast of investors before its suspension by the USE. The Corporation’s share price, which opened at Shs 45 on its listing on the bourse, peaked at Shs 75 before climbing down to Shs70, where it was when it was suspended by the USE. Its record of posting profits and paying dividends to shareholders since 2006 has attracted the interest of individual and institutional investors.

The Corporation, which has at least 2,000 investors, however, experienced a dip in its performance in the first half of 2011, which the Managing Director, Sam Njoroge, attributed to “Negative publicity arising from unresolved issues of the Makerere University Deposit Administration Plan.”

This, notwithstanding, market analysts are optimistic that NIC will bounce back sooner than envisaged, especially with the management’s resolve to dispose of obsolete assets that carry high depreciation charges and erode income flows.

NIC reputed as the payer of the largest quantum of insurance claims in East Africa, with total asset base of Shs 73.324 billion in 2010 remains the strongest and most capitalised quoted insurance company listed on Uganda’s bourse.

NIC Reinstated on Uganda Securities Exchange

The Listing Committee of the Uganda Securities Exchange (USE) today lifted, with immediate effect, the suspension of National Insurance Corporation Limited (NIC) under rule 6 of the Listing Rules 2003.

Chief Executive of USE, Joseph S. Katimirike, conveyed the notice of reinstatement in a letter to the Corporation, saying this was sequel to NIC’s full compliance with USE’s directive on the publication of the Corporation’s 2010 audited accounts; the unaudited 2011 half-year report and the notice of Annual General Meeting (AGM).

Managing Director of NIC, Sam Njoroge, described the lifting of the suspension as a welcome development, stressing: “As a publicly quoted institution with strong financial capacity, NIC will continually endeavour to comply with all regulatory requirements as we maintain the core values of good corporate governance towards meeting the aspirations of all our stakeholders.”

He reaffirmed the commitment of NIC to being the preferred provider of insurance, risk management and financial services in Uganda and, indeed, the East African region through the creation, preservation and protection of wealth whilst being socially responsible.

“We shall continue to diligently work with all stakeholders, including UIC, USE, CMA, Government, our clients and shareholders in our steadfast drive to achieve our goals and engender higher contributions by NIC to the growth and development of the economy of Uganda,” Njoroge said.

The managing Director also seized the opportunity to invite shareholders to the Corporation’s upcoming AGM, which will hold from 2.00pm on 28^th September at the Imperial Royale Hotel.

We write to shed light on the series of press reports about the controversies surrounding the Makerere University Deposit Administration (DAP). With a number of critical issues raised, National Insurance Corporation (NIC) is compelled to respond and clarify its position on the deliberate misinformation being peddled.

As a responsible organization, it is not in the character of NIC to conduct its business in the media. However, we feel obligated to correct misconceptions that the reports have created through material misstatement of facts as they pertain to NIC and the Makerere DAP scheme.

We acknowledge having received the Final Report on MUK-DAP from the Auditor General on 13^th July 2011 and as an essential party in the issue, NIC has not been given sufficient time to review the findings of the report which require a technical team of experts to exhaustively make recommendations. Although the Report clearly spells out that it is for information purposes only, the other party has proceeded to discuss the report in the media, which we believe is unmerited and out of order.

With the given issues at stake, all parties should be guided by adherence to due process and the rule of law as we seek an amicable resolution. Having noted His Excellency’s admonition last year that a strike action will be tantamount to punishing the wrong party, we appeal to the mediating parties to give NIC and MUK a roundtable discourse to enable peaceful resolutions on the matter at hand.

NIC’s position is that we do not have a dispute with Makerere as it has been reported and neither do we contest or consent to the figures in the report by PWC.

It is important to note that the above said report plainly provides an estimate of the value of the DAP fund and it should be reiterated that NIC paid Shs. 10 billion to Makerere DAP stakeholders in December 2010 and February 2011 and not Government as press reports insist. NIC’s payment to Makerere within a period of two weeks and two months respectively demonstrates the Company’s financial strength in handling claims of any magnitude.

Despite Makerere’s withdrawal of contributions to the DAP scheme in 2005, NIC has devotedly paid claims and benefits to the DAP beneficiaries in respect to the scheme as an illustration of our commitment to the Group Master Policy (GMP), the overriding document of the contract that clearly spells out the terms and conditions of the scheme.

The fact of the matter and in the spirit of sticking to the contract, NIC guaranteed an interest rate of 10% on the scheme no matter the economic situation which we still hold in esteem though imperatively NIC has a right to the withdrawal charges and surrender value penalties according to Condition 8 of the contract.

Moving forward, NIC maintains its stance that due process for a fair hearing on the PWC report and transparency be allowed to guide the conduct of all parties as we seek to resolve matters relating to the Makerere DAP scheme.

Terms of Reference by Auditor-General amongst others was to draw up a withdrawal plan containing various options that will not hurt the financial wellbeing of either entity and provide further guidance on matters which would assist NIC and MUK in reaching an amicable resolution. We call upon the mediating parties to review as established.

For the record and for the avoidance of doubt, NIC is currently the largest Life and Pension carrier in Uganda with a composite asset base of Shs. 70 billion, Shareholders funds’ peaking at Shs. 11 billion and strong asset base to back up whatever option that will be reached in resolving the matter.

We reaffirm our total commitment to providing high-quality insurance and risk management services in Uganda and the region. We will continue to apply industry best practices while remaining profitable and socially responsible.

Thank you

Signed

MANAGEMENT