26 insurance firms have gotten approval from the National Insurance Commission (NAICOM) to go ahead with their recapitalisation plan.
This was revealed in a circular signed by Mr Rasaaq Salami, NAICOM’s Head, Commissioner for Insurance Directorate.
The circular noted that NAICOM received plans of recapitalisation from 47 insurers and 2 re-insurers after it ordered them to increase their paid up capital. However, only 26 plans were approved by the regulator.
• Twenty-six (26) companies have been granted ‘No Objection’ to proceed with their plans.
• 17 companies’ plans were corrected and have been advised to resubmit their new plans using paid-up capital and not shareholders fund.
• Four (4) companies do not have the requisite 2018 financial statements and are thus, advised to review their plans of using IPO.
• One (1) company has litigation issues and has been advised to resolve them as soon as possible to enable its progress.
• One (1) company’s submission was noted not to have met the necessary requirements.
• The review of submissions from two (2) companies is ongoing.
• Three (3) companies are yet to submit their recapitalisation plans, the circular said.
NAICOM said it was committed to making sure that the recapitalisation roadmap was achieved in line with the best interest of all stakeholders.
Backstory: Early this year, the National Insurance Commission (NAICOM) proposed an increment of the capital base for insurance firms.
• Life insurance underwriting firms were mandated to shore up their capital base to from N2 billion to N8 billion.
• Insurance firms underwriting general business were mandated to shore up their capital from N3 billion to N10 billion.
• Composite insurance firms were asked to raise their capital from N5 billion to N18 billion.
• While Reinsurance firms moved their current minimum capital of N10 billion to N20 billion.
The firms were told to submit their recapitalisation plan to the Commission on or before 20th August 2019.
NAICOM was expected to review the plans and provide responses on the submitted recapitalisation plans on or before September 17, 2019. NAICOM noted that several insurance companies met the deadline for submission of recapitalisation plans.