Ahead of a new recapitalisation deadline that has been set for insurance companies, the National Insurance Commission (NAICOM) disclosed yesterday that no insurance company in the country has technically met the financial requirement set forth by the regulator.
This was disclosed by NAICOM’s Director of Policy and Regulations, Pius Agboola, who spoke during a seminar in Kano.
According to Agboola, the fact that some of these insurance companies now have investments in excess of NAICOM’s requirement does not equate them meeting the recapitalisation requirement. In view of this, he debunked claims by some insurance companies, which said they had recapitalised in line with NAICOM’s guidelines.
Agboola’s actual argument: Daily Trust quoted Agboola as saying that NAICOM’s recapitalisation directive is not just all about raising new capital. It is also about all the recapitalisation processes being met.
“Some companies’ paid-up capital is N5 billion and they may have up to N20 billion in their reserve, but that does not mean that they have met the requirements. Even with what they have, they will have to call board meeting, pass board resolution, among other processes, even with NAICOM.”
In the meantime, NAICOM said it would issue the guidelines for the processes which must be followed in the course of the recapitalisation exercise, according to Agboola. He also noted that all the insurance companies must follow this process, including those claiming that they have met the requirement.
It should be recalled that the insurance regulator initially set an earlier deadline requiring general and life insurance companies to increase their paid-up minimum share capital to N10 billion and N8 billion respectively. Nairametrics reported following the directive, insurance stakeholders went about several ways of securing capital in order to meet the financial requirement, even as some have continuously criticised the regulator’s move.
As though in response to the criticisms, the regulator shifted the deadline several times. The latest shift has now set the deadline to December 2020, as Nairametrics reported in December 2019.