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.
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.
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.
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.
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.
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.
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.”