The Acting Insurance Commissioner, Mr Sunday Thomas has promised to pursue the process of strengthening the Insurance sector capability in order to help in retaining businesses in the country.
He revealed this at a meeting with reporters in attendance, restating his desire to carry out this assignment with due diligence. He also asked for cooperation across board in order to make a meaningful contribution to society.
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The NAICOM boss also hinted that the issue of recapitalization is very vital if the sector must grow.
“We believe that at the end of the exercise, we would have turned around the image of the market. As an agency of the Federal Government, more than ever before, NAICOM wants to be visible, while also doing everything within its terms of reference as an institution to improve on its contributions to the economy. We have the mandate to ensure that the exercise throws up very solid companies.
“The insurance sector wants to be part of the big game players and the driver of that initiative has to be the regulator. The issue of recapitalization is more critical than ever before. Of course, there are shades of opinion about its adequacy, it’s timing. But for me here, it is just to tell you that the work ahead is a whole lot more than you can ever imagine.
More clearly put: Recapitalization for the NAICOM is a process that showcases a long-standing industry, willing to carry out all its obligations to the letter. Sunday said even though the process would be duly followed, they were willing to welcome new investors if need be to strengthen the sector. He noted that perfection and a viable insurance sector was the end-game.
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The back story: A Nairametrics report portends a possible increase in the capital base of insurance firms to about N15 billion. According to industry sources, NAICOM mandated insurance firms to recapitalize or merge in order to meet the new capital requirement.
The move is expected to curtail the risk insurers take with their little capital, coupled with the twin risks arising from the impairment of certain assets and inappropriate pricing of insured risks. The essence of this increase is to promote soundness and profitability of insurers, support the stability of the financial system and increase insurance contribution to the nation’ GDP.