The number of insurance firms that have secured no objection from the National Insurance Commission (NAICOM) to go ahead with their recapitalisation plan is presently 44.
The Details: Recall that one month ago, Nairametrics reported that the number stood at 26. The new development was disclosed by the acting Commissioner, Olorundare Thomas, who was represented by the Director, Policy and Regulation Directorate, Mr Pius Agboola at an event that held in Lagos.
During the event, it was disclosed that two insurance firms had decided to merge in order to meet up with NAICOM’s recapitalisation roadmap.
Further Details: Nairametrics also gathered that ten firms were still awaiting NAICOM’s approval to commence recapitalisation. In that pool of ten, two insurance firms failed to submit their plans to the regulating body; the plans of two firms were under review while the remaining 6 had their proposals turned down.
Backstory: Early this year, NAICOM proposed an increment of the capital base for insurance firms.
- Life insurance underwriting firms were mandated to shore up their capital base 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.
- 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.
Mr Pius Apere, the Managing Director/Chief Executive Officer, Anchor Actuarial Services Limited, urged NAICOM to convert any insurance company that failed to meet up with the terms of recapitalisation to a micro insurer.
He said converting failed insurance firms into micro insurers would help widen the scope of the insurance sector instead of a massive recapitalisation that might cause several struggling firms to die off.