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SEC to aid insurance recapitalization process – Insurer’s Committee

SEC has declared its support for insurance firms seeking to take advantage of long term investments in the capital market. #SEC #NSIA #RECAPITALISATION

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SEC to aid insurance recapitalization process - Insurer’s Committee

The Securities and Exchange Commission (SEC) has declared its support for insurance firms seeking to take advantage of long term investments in the capital market as they embark on the recapitalization process.

The capital market regulator, as part of palliatives offered in solidarity to the National Insurance Commission (NAICOM), as it vowed to support insurers seeking funds at the market to boost their operations.

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A member of the reconstituted Insurers’ Committee and Managing Director, NSIA Insurance, Ebere Nwachukwu, said that about 10 companies had already approached the capital market to seek assistance in raising funds for the recapitalisation exercise and SEC had pledged its support for them.

[READ MORE: SEC reaffirms commitment to promote Commodities Trading)

She assured that the commission had promised to render the necessary assistance within its regulatory power to support the companies, stressing that insurers should take advantage of the capital market’s long term investment fund to boost their finances.

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Nwachukwu noted that the recapitalisation exercise was intended to strengthen the financial position of the insurance industry.

Quoting the Acting Commissioner for Insurance, Sunday Thomas, she said that NAICOM had always partnered with SEC and other relevant agencies to seek palliatives for the insurance industry’s growth.

She said, “The committee had prepared the minds of the operators toward the adoption of International Financial Reporting Standards 17 (IFRS 14), advising that funds should be budgeted for training to make the adoption easier.

“The committee also disclosed that the insurance industry rebranding had been put on hold due to poor financial response on the part of some members.

“The rebranding project has been stopped. We did because of issues regarding poor participation by operators. We have to come back to it. We are back on the drawing board,” the committee told Guardian.

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However, Nairametrics had reported that Chairman, Mutual Benefits Assurance, Akin Ogunbiyi, criticised the on-going recapitalisation exercise in the insurance industry describing it as the greatest disservice to the firms and industry.

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What it implies: Ogunbiyi said the exercise had created a confidence problem in the industry as it could kill the industry if it was not reversed or given a longer-term period as deadline.

[READ ALSO: Expert advises SEC on new risk prevention methods)

He said, “In fact, something drastic needs to be done to reverse this new capital exercise. It has created a lot of confidence problems.

“Even the people doing insurance don’t know what will happen. If an industry is working with N5bn and they are not able to use it for profitability, and you say increase it to N18bn, what are we insuring?

“Government should hear it from me; it is killing the industry. If nothing is done quickly, either to reverse this or to give a three-year or long-term period for the recapitalisation, the industry is gone. Today, the insured doesn’t even know what to do. I can tell you that only five insurance companies have passed that recapitalisation stage out of 49 companies. Is that the kind of industry that we want.”

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Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper. The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference. The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - abiola.odutola@nairametrics.com.

1 Comment

1 Comment

  1. Ayodele Bukola Adeyiolu

    December 16, 2019 at 10:57 am

    Something drastic needs to be done to reverse this new capital by Nigeria government if not it will jeopardize the interest of majority of Nigerians even foreigners towards insurance company in this country because out of 49 insurance company only 5 have fully complied or government should give long term deadline for implementation.

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Tech News

Tiktok’s In-App revenue surges amid lockdown

ByteDance Ltd’s brainchild, TikTok, together with Douyin ranking tops globally on mobile apps with the highest revenue generated for the month of April.

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TikTok announces $250 million pledge to aid combat coronavirus, Does YouTube stand a chance against TikTok?

The meme-making business has proven to be worth all the fuss, with TikTok, as well as its Chinese twin app, Douyin, ranking tops globally on mobile apps with the highest revenue generated for the month of April.

Sensor Tower, notes that just in the first quarter of this year, ByteDance Ltd’s brainchild, TikTok, together with Douyin which caters to the Chinese market, generated 315 million downloads globally, from the 187 million it had just a year earlier.

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The ranking, which was based on their in-app purchases, reveal a tenfold increase, as the companies garnered a whopping $78 million in revenue. The Chinese market is said to have contributed 86.6% of Douyin’s revenue, followed by the U.S market which contributed 8.2%.

This places them ahead of older names like Netflix & YouTube. As opposed to using subscriptions like these established brands, TikTok and Douyin allow users to purchase virtual currency to spend on their favorite content creators.

(READ MORE: Does YouTube stand a chance against TikTok?)

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While ByteDance is exploring the world of online commerce, it continues to rely on advertising as its primary income source. However, Emarketer projects that more than 75 million US social network users will make at least one purchase from a social channel in the year 2020.

 

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Business News

Sanwo-Olu to virtually inaugurate projects as he presents scorecard of first year in office

Some of the projects to be commissioned will be done virtually, while a few will be done on-site.

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COVID-19: Lagos State to begin curfew on Sunday to disinfect metropolis, Lagos state government discharges 7 more coronavirus patients, Lagos state will reverse to full lockdown, Sanwo-Olu to virtually inaugurate projects as he presents scorecard of first year in office

Lagos state governor, Babajide Sanwo-Olu, will virtually inaugurate housing, education, and road projects on May 29, as part of activities to mark his first year in office.

According to a report by NAN, the projects are part of the government’s efforts to renew infrastructure in critical sectors and to make the commercial centre a smart city.

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Some of the projects to be commissioned will be done virtually, while a few will be done on-site.

The projects

Lagos state Commissioner for Information and Strategy, Mr Gbenga Omotoso, listed some of the projects in an official statement. He said:

”In the education sector, Sanwo-Olu will conduct virtual inauguration of completed classroom blocks in Maya Secondary School, Ikorodu; Eva Adelaja Junior School, Bariga; and Saviour Primary School, Ifako-Ijaiye, among others. 

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“Virtual inauguration of completed works such as the Concrete Jetty in Baiyeku, Ikorodu, Aradagun-Ajido- Epeme Road in Badagry, and the Maryland Signalisation project also form part of the itinerary to commemorate the anniversary.”

(READ MORE: Lagos increases health workers’ allowances, commissions local production of face masks)

Omotoso also stated that the Governor would inaugurate the 360-unit Lagos Homes in Ikorodu, and then visit Igbogbo Baiyeku IIB Estate, Lekki, and the Courtland Villas on Femi Okunnu Estate during the week.

Plans for celebrating Children’s Day

 In a related development, Governor Sanwo-Olu will deliver an address on Wednesday May 27 to mark the children’s day celebration, and the 53rd anniversary of Lagos state.

Omotoso, however, noted that all celebrations would be kept on the low in reflection of the current challenges and realities of the COVID-19 pandemic.

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Presenting one-year scorecards

The activities for the week are expected to begin with press briefings at J.J.T Park in Alausa on May 27, where members of the State Executive Council will present their scorecards in line with the six pillars of the state’s T.H.E.M.E.S Agenda.

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(READ MORE: Lagos Medical workers call off strike, as IG sends strong warning to security agencies)

According to the information commissioner, there will be two sessions of press briefings daily from May 27 to June 3, as the Governor considers it expedient to render a stewardship account of the last one year.

“Three special publications highlighting the achievements of the Babajide Sanwo-Olu administration and testimonies of beneficiaries of various initiatives of the government are slated for presentation to the public by the governor and his Deputy, Dr Obafemi Hamzat,” he added.

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Around the World

Central banks digital currencies pose a threat against the U.S dollar

In general, digital currencies could weaken the power of U.S. sanctions and the ability of the U.S. Treasury to watch illicit financial flows.

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Central banks digital currencies pose a threat against the U.S dollar.

A new report by America’s biggest bank, JP Morgan Chase, said the U.S dollar is being faced with a major threat as many  central banks’ digital currencies continue to gain traction.

Analysts, including Josh Younger, the head of U.S. interest-rate derivatives strategy and Michael Feroli, the chief U.S. economist, wrote in a report saying this:

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“There is no country with more to lose from the disruptive potential of digital currency than the United States.

This revolves primarily around U.S. dollar hegemony. Issuing the global reserve currency and the medium of exchange for international trade in commodities, goods, and services convey immense advantages.” 

Aditi Kumar and Eric Rosenbach also recently penned an opinion piece for Foreign Affairs in which they noted that “Just recently, America’s arch-rival China became the first major economy to carry a real test of a national digital currency.”

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(READ MORE: Why the strong dollar is giving Nigeria headache)

In general, electronic currencies could weaken the power of U.S. sanctions and the ability of the U.S. Treasury to watch illicit financial flows. A digital Chinese currency (yuan) combined with China’s developed electronic payment systems may give China more future influence than it ever bargained for.  

What Nigerians should know about Digital currencies

A digital currency is a cash balance recorded electronically on a store value card or other physical devices, which could someday replace the physical notes of the naira, for instance.

Digital currencies can be decentralized, that is where the control over the cash supply can come from diverse sources. Digital  currencies can also be centralized, where there is a midway point of control over cash supply, just like the way central banks work.

Central banks digital currencies pose a threat against the U.S dollar.

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Although JP Morgan does not see the U.S dollar being overthrown as the world’s reserve currency anytime soon, experts warned that the U.S dollar dominance could weaken. This is because its processing trade settlement and the SWIFT system could make it more vulnerable.

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The American bank continued by saying:

“Offering a cross-border payment solution built on top of a digital dollar would, particularly if designed to be minimally disruptive to the structure of the domestic financial system, be a very modest investment to protect a key means to project power in the global economy,

“For high-income countries and the U.S. in particular, digital currency is an exercise in geopolitical risk management.” 

Federal Reserve Chairman Jerome Powell said months ago that the Federal Reserve was taking a critical view on the issues regarding a digital currency.

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