The National Insurance Commission’s (NAICOM) deadline for submission of recapitalisation plan has been met by several Insurance companies. NAICOM had directed Insurance and Reinsurance firms to submit their recapitalisation plans to the Commission on or before August 20, 2019.
According to the Deputy Director and Head of Corporate Communication, NAICOM, Rasaaq Salami, the commission is now proceeding to review the plans after AXA Mansard Insurance Plc, Allianz Nigeria Insurance Plc, SUNU Assurances Plc, FBNInsurance, NEM Insurance Plc submitted theirs.
Other companies that beat the deadline includes Cornerstone Insurance Plc, LASACO Assurance, AIICO Insurance Plc and Mutual Benefit Assurance Plc. NAICOM had issued the directive three weeks into July, giving the Insurance companies about one month to draft their recapitalisation blueprint.
The purpose of the recapitalisation plan is to figure out how the companies intend to raise new capital in order to meet up with the new share capital requirement, which is not later than June 30, 2020. The new capital structure for Life, Non-Life and Composite insurance companies, including re-insurance companies will be N8 billion, N10 billion, N18 billion and N20 billion respectively, from N2 billion, N3 billion, N5 billion and N10 billion.
Commenting on the compliance level of the Insurance Companies, Salami said, “There is compliance by the companies and the Commission knows their plans. The next step for us is to review what they have submitted.
Path to recapitalisation;
- Insurers and Reinsurers shall submit their recapitalisation plan to the Commission on or before 20th August 2019. The plan should include among others a capital status of the Company based on the above referenced circular as at the last Audited Financial Statements; Board resolution on how to comply with the directives; and Detailed action plan on how the funds for the recapitalisation are to be sourced with timelines and deliverables.
- Also, companies intending to seek funds from the capital markets are required to submit their plan of action on a file-and-use basis while companies that intend to merge or acquire another should submit their proposal after which they must comply with Sections 30 and 31 of the Insurance Act 2003.
- The commission shall review and provide responses on the submitted recapitalisation plans on or before September 17, 2019. The review may require meeting with the Board and Management of each of the insurance company on its recapitalisation plan.
- Similarly, the Commission is engaging with other regulatory bodies for possible palliatives in addition to those being considered by the Commission.