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Business News

Recapitalisation: Brokers warned to stop doing business with ‘weak insurance firms’

Following the move by the National Insurance Commission (NAICOM) to mandate insurance firms to recapitalise, brokers may now have to distance themselves from doing business with financially-weak insurance firms.

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NAICOM

Following the move by the National Insurance Commission (NAICOM) to mandate insurance firms to recapitalise, brokers may now have to distance themselves from doing business with financially-weak insurance firms.

This was revealed by the President of the Nigerian Council of Registered Insurance Brokers (NCRIB), Shola Tinubu, who warned brokers against doing business with insurance companies who have low financial records.

While addressing the recapitalisation exercise NAICOM recently mandated insurance companies to undergo, Tinubu described firms that would not be able to meet up with the regulator’s recapitalisation requirement “weak”.

Shola Tinubu, Nigerian Council of Registered Insurance Brokers, NCRIB

President, NCRIB, Shola Tinubu

[READ ALSO: FG suspends Recapitalisation of insurance sector]

He also stated that it is pertinent for brokers to take caution, as some members of NCRIB still indulge in placing businesses with companies that are challenged.

“It is no more news that NAICOM has jerked up the minimum paid-up capital of Insurance Companies in Nigeria.

“As insurance brokers, we cannot shy away from the fact that this directive will adversely affect the entire industry. As a proactive Council, we are critically examining the implications and possible solution to the effect the implementation would have on our members.”

[READ MORE: NAICOM urged to extend deadline for recapitalisation of Insurance firms]

Meanwhile, it is pertinent to note that every insurance firm will be able to meet up with the recapitalisation requirements by NAICOM. In view of this, stakeholders in the insurance industry are considering mergers and acquisitions.

Recall that NAICOM recently increased the minimum paid-up share capital of insurance and reinsurance firms, a move which sent shock waves across the country’s insurance sector.

Life insurance firms’ capital base was raised from N2 billion to N8 billion, while general companies got a raise from N3 billion to N10 billion. Meanwhile, composite insurance companies’ capital was raised from N5 billion to N18 billion while the capital base for reinsurance companies was also increased from N10 billion to N20 billion.

NAICOM has fixed June 30th, 2020 as the deadline for the compliance with the new capital base.

READ FURTHER: Should Gokada be afraid as Uber launches boat service in Lagos?

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Famuyiwa Damilare is a trained journalist. He holds a Higher National Diploma (HND) in Mass Communication at the prestigious Nigerian Institute of Journalism (NIJ).Damilare is an innovative and transformational leader with broad-based expertise in journalism and media practice at large. He has explored his proven ability in the areas of reporting, curating and generating contents, creatively establishing social media engagements, and mobile editing of videos. It is safe to say he’s a multimedia journalist.

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Energy

Agip shut oil facility in Bayelsa due to oil spillage, environmental pollution reported

Agip on Wednesday confirmed an oil leak, resulting in a shutdown.

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The Nigerian Agip Oil Company (NAOC) has confirmed the shutdown of its Idu oilfields at Egbebiri settlement within Biseni in Yenagoa Local Government Area in Bayelsa, due to an oil spillage.

A Joint Investigative Visit (JIV) report on the incident said that the leakage at the facility could be traced to equipment failure due to a rupture at the wellhead.

According to a report from the News Agency of Nigeria (NAN), Eni, the parent company of NAOC, in a response statement, said the facility was shut down to prevent further damage to the environment.

READ: Shell wants oil spillage case tried in Nigeria, but victims say no 

What Eni is saying

An Eni spokesperson on behalf of the Italian Energy firm, in a statement, said, “As soon as the incident was reported, we activated our oil spill response, shut in the well, and notified government regulatory agencies.

“The Joint Investigation Visit (JIV) was carried out on 09/05/2021, with the participation of community representatives and the government regulatory agencies.

“The event occurred within the Company’s wellhead location which is paved and walled round. There is no significant third-party impact,” Eni stated.

READ: UK court ruling affects acquisition of Shell’s oil block by Governor Wike 

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Environmental Rights Group reports environmental degradation

An environmental rights group, Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN), however, said that the incident which discharged crude and associated gas had severely polluted the environment.

The Non-Governmental Organisation said that a visit to the spill site showed pictorial evidence of the crude spreading beyond NAOC’s right of way as nearby vegetation were affected as a result of the crude impact.

The Head of Field Operations at ERA/FoEN, Mr Alagoa Morris, in a field report on the spill said the Idu fields was notorious for frequent spills caused by equipment failure.

He said, “The people of Egbebiri in Biseni kingdom have experienced several oil spills over the years. And all the oil spill incidents documented by the Environmental Rights Action/ Friends of the Earth Nigeria (ERA/FoEN) in this community environment have occurred as a result of equipment failure and on Wellheads.

“ERA/FoEN has had cause to visit the environment of Idu Well 5 and 11 located within the same place in the past and it has always been Idu Well 11 spewing crude oil into the environment.

“Available records from ERA/FoEN indicate that there have been previous oil spills from this particular Idu Well 11 operated by Agip. Before concluding this Field Report, ERA/FoEN confirmed that Joint Investigation Visit (JIV) was carried out on Sunday, 9th May 2021.

“This is why the official Spill Reference No 2021/LAR/028/058 is indicated in this report; sourced from the JIV report. Cause of spill was attributed to equipment failure,” ERA/FoEN stated.

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The report quoted a resident of the community simply identified as Georgie as saying that the spill incident of May 7 spilled oil from around 10 p.m till about 8 a.m the next day before the leak was stopped adding that the level of damage was enormous.

What you should know

It can be recalled that in a similar circumstance, Shell Petroleum Development Company reported an oil pipeline spillage at its Okordia-Rumekpe 14-inch crude truck line, discharging about 213 barrels of crude oil into the Ikarama community in Bayelsa State and polluting about 1.34 hectares of land.

This new leakage is the latest in a series of oil spillages by the multinational oil exploration and production companies, which has put them in conflict with the host communities.

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Energy

Nigeria records system collapse during holidays

Nigeria’s national electricity grid collapsed on Wednesday morning.

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Abuja, Ikeja Discos top list in collection efficiency in Q1 2020- NERC, Estates in Lekki increase electricity tariff to N105/kWh, Eko Electric, Ikeja and 5 others to face NERC sanction for non-compliance, CBN reveals framework for financing National Mass Metering Programme (NMMP), Nigeria ranks eight African country with well-developed electricity regulatory frameworks, as Uganda tops.

The Nigerian grid has experienced a partial collapse, dealing a blow for stay at home Nigerians during the holidays.

This was confirmed in a statement by the Eko Electricity Distribution Company (EKEDC), as seen by Nairametrics.

What EKEDC is saying about the grid collapse:

“Dear customer, there is a partial system collapse on the National Grid. Our TCN partners are working to restore supply immediately. Please bear with us.”

According to latest reports, partial restoration of power is already occurring across the country.

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