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Business

House of Reps directs NAICOM to suspend recapitalisation of insurance firms

NAICOM has come under intense pressure from the House of Reps to suspend the planned recapitalization of insurance firms.

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NCC, MDA, SEEPCO, local content laws, CBN Cashless Policy: Reps eye policy reversal, court Emiefele approval , Lawmakers tackle Finance Minister over failed CCTV project worth $460 million , Former Ghanaian President, Mahama begs Buhari to open border Former President of Ghana, John Mahama has appealed to President Muhammadu Buhari to open up its borders saying that Ghana has been heavily affected by Nigeria’s decision to close its borders. Mahama said that for economic activities to resume in West Africa, Nigeria needs to reconsider its decision on the total border closure. He made this plea while delivering the seventh anniversary lecture of investiture into The Realnews Hall of Fame and the unveiling of a book, titled: Pathways to Political and Economic Development of Africa. According to the former president as reported in The Nation, the closure of especially the Benin border, was taking a significant toll on many small and medium businesses, especially in Togo, Ghana and Cote D’Ivoire, which relied on inter-country trade. “I am sure that businesses in Nigeria that rely on supplies from these countries are also suffering. With the signing of the joint border task force agreement between Nigeria and her neighbours, I will like to take this opportunity to appeal to Nigeria to open up her border so that economic activities can resume,” Mahama said. While reacting to the shut down of shops owned by Nigerians by the Ghana Union of Traders’ Association (GUTA) as retaliation to the border closure, Mahama said; “Back home in Ghana, I also look forward to our government’s intervention that brings an immediate cessation to the forceful and illegal closure of shops of foreigners, especially Nigerians, by members of the local trade associations”. Mahama who is a former Chairman of the Economic Community of West Africa States (ECOWAS) spoke on how he still has an abiding interest in the progress of ECOWAS and its people. In this light, he said that Nigeria being the home of ECOWAS and the largest economy in West Africa should not allow the objective principles for establishment of ECOWAS to be lost. Meanwhile, the Vice Chancellor of Niger Delta University, Bayelsa State, Prof. Samuel Edoumiekumo, advised President Muhammadu Buhari not to yield to pressure to reopen the borders. Edoumiekumo who was also present at the lecture said President Buhari should remain firm in his resolve to ensure economic growth and the country’s development as the border closure will generate more revenue for the nation and tackle smuggling., Nigerians are enraged as lawmakers reject Innoson cars for latest Toyota Camry , FMBN ex-MD ordered to refund his salary, submit FMBN accounts over infractions

The House of Representatives has passed a resolution directing the National Insurance Commission (NIACOM) to suspend the planned December 31, 2020 mandatory deadline for the first phase of 50%– 60% of the minimum paid-up share capital for insurance and reinsurance companies.

The Bill, sponsors and timeline

The resolution followed the adoption of a motion of urgent national importance titled: “Need To Suspend The Proposed Recapitalisation Of Insurance Companies, Insurance Intermediaries And Other Players in the Insurance Sector, especially in View of the COVID-19 Pandemic and the Economic Recession,” duly sponsored by Hon. Benjamin Okezie Kalu and 15 other lawmakers.

READ: Regency Alliance Plc’s shareholders do not want to be paid dividends

With the adoption of the motion for the suspension of the recapitalization process, Ahmed Idris Wase, the Deputy Speaker, who presided over the plenary session referred it to the House Committee on Insurance.

According to the House, the suspension is expected to last for six months from January – June 2021 and is necessary to give the insurance operators soft landing, as well as cushion the effects of Covid-19 and other unforeseen circumstances they might have suffered.

READ: Prestige Assurance could be a good opportunity if it gets its recapitalization right

What they are saying

According to Hon. Kalu, “In times as this, the best move by the government and by regulators is to push more liquidity into the economy in a bid to stimulate economic activities, encourage spending and prevent job losses as well as support the indigenous businesses in the country.

READ: Stanbic IBTC Holdings Plc establishes its wholly-owned life insurance subsidiary

“This is pertinent because in addition to the impact of the COVID-19 pandemic, the industry was also affected by the aftermath of the #EndSARS protest in which several insured properties were affected and to this effect, most of these insurance companies have lots of liabilities to settle in order to fulfil their obligations so as not to deny the rights of these affected insured persons

These are the types of fiscal, monetary and regulatory approaches that are being adopted in most countries. Hence, it may not be suitable at this time for NAICOM to even proceed with its planned phased recapitalization programme because of the overall impact it may have on the already fragile economy and the insurance sector.”

READ: #EndSARS: What some Insurance companies have done so far

Why this matters

  • NAICOM introduced two-phased recapitalization programmes, wherein, 50% of the minimum paid-up share capital for insurance companies must be met by 31 December 2020 and 60% for reinsurance companies must be met on the same date.
  • Total compliance with the total minimum capital requirement must be achieved on or before 30 September 2021.
  • With the Covid-19 pandemic and the #EndSARS protests which crumbled the Nigerian economy, a lot of insurance companies are yet to commence full businesses activities and thus compelling them to meet these requirements would definitely put them out of business and throw a number of people out of jobs.
  • Related to the #Endsars protests, some of the insurers have lots of liabilities to settle in order to fulfil their obligations to the affected insured persons, with huge impacts on their liquidity.

READ: Insurance Companies shocked as NAICOM increases capital base by 200%

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Johnson is a risk management professional and banker with unbridled passion for research and writing. He graduated top of the class with B.sc Statistics from the University of Nigeria and an MBA degree with specialization in Finance from Ambrose Alli University Ekpoma, with fellowships from the Association of Enterprise Risk management Professionals(FERP) and Institute of Credit and Collections management of Nigeria (FICCM). He is currently pursuing his PhD in Risk management in one of the top-rated universities in the UK.

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Business

Lagos, Chinese firm to rollout 1,000 SUVs as taxis, to complete auto assembly plant in 12 months

Lagos State Government has signed an agreement with a Chinese firm to roll-out 1,000 SUVs as taxis for Lagos residents.

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Lagos dismisses levy on audio and visual contents, suspends LSFVCB boss, Lagos SEC meeting goes virtual as full lockdown commences, Partial lockdown guidelines for businesses from May 4, Nigeria @ 60: Lagos State Government opts for a low-key celebration of the Independence Day

Lagos State Government has signed an agreement with a Chinese firm, Choice International Group (CIG) Motors Co. Ltd. on Thursday for the roll-out of 1,000 Sport Utility Vehicles (SUVs) as taxis for Lagos residents.

The signing and flag-off ceremony which was held at the Lagos House, Marina also included the signing of an agreement for the establishment of a Motor Assembly Plant in Lagos State, with the Governor saying that the roll-out of vehicles from the plant is expected within the next 12 to 18 months.

Lagos State Governor, Mr Babajide Sanwo-Olu, said that the Lagos State Taxi Scheme was another innovative policy of his administration targeted at making life easier for Lagosians, improving mobility and creating a seamless multi-modal transport system.

Sanwo-Olu said that the scheme would create jobs, accelerate socio-economic growth, and further put the state on the global map as the centre of excellence and a modern megacity committed to sustainable development.

What Governor Babajide Sanwo-Olu is saying

Sanwo-Olu pointed out that the task of bequeathing a safe, efficient, quick, and modern public transport system is a key thrust of the administration’s T.H.E.M.E.S. Agenda.

He said, ”We are guided by the need for an equitable transport system with mobility choices for our people. The Taxi Scheme, to be known as ”Lagos Ride”, which is being inaugurated today is in fulfilment of our desire to give Lagosians transport choices.

”It is one of the Lagos State Government’s socio-economic intervention programmes- a modern ride-hailing service that will be professionally managed in line with global best practices. Under the Lagos State Taxi Service, drivers/operators will be given the cars for a period of four years during which they pay a monthly instalment and they will have the opportunity of owning the cars after they have fully paid the hire amount.

”The Lagos State Taxi Service is structured along a profitability model, it is self-sustaining and able to expand and regenerate itself,” he said.

Sanwo-Olu said that the establishment of the Motor Assembly Plant was expected to revive industrialisation, increase citizens’ employment and wealth creation, boost tourism, and encourage technology sharing, adaptation, and advancement.

He said, ”As we inaugurate the taxis and sign the Joint Venture Agreement for the establishment of the Motor Assembly Plant, Lagosians should expect a roll-out of vehicles from this plant within the next 12 to 18 months.

”I urge the beneficiaries of the Lagos State Taxi Service to collaborate with us to sustain the scheme.We have the political and administrative will to ensure the Taxi Scheme survives.

”I am hopeful that the operators will cooperate with the Lagos State Government to render excellent service to the people,” he said.

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The Group Chairman, CIG Motors, Diana Chen, said that they hope to celebrate this exciting moment again when 1,000 units of branded SUVs with high-tech technology arrive and run across Lagos streets and roads, with 1,000 well-trained drivers carrying happy customers that live and work in Lagos.

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What this means

  • This collaboration by the Lagos State Government with the Chinese auto firm is one of the ways of the government to get private sector participation in a modern transport system within the metropolis’
  • The establishment of the Assembly Plant and the Lagos Taxi Scheme were among the benefits of Governor Sanwo-Olu’s official trip to China.
  • This is a welcome development as it will help to change the face of public transportation in the state.

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Business

FG announces extension of work-from-home directive for GL 12 officers, below

FG has extended the work-from-home directive for civil servants from GL 12 and below until the end of March.

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Nigeria gradually moves to total lockdown as FG asks public servants to work from home

The Federal Government has announced the extension of the work-from-home directive for civil servants from GL 12 and below until the end of March.

This is seen as part of the measure by the government to contain the spread of the coronavirus pandemic which had surged earlier this year, due to the second wave of the outbreak across the country and the discovery of a new variant of the disease.

This announcement was made in a statement by the Head of Service of the Federation (HOSF), Dr Folasade Yemi-Esan, and signed by the Director of Press and Public Relations, the office of HOSF, Mr Abdulganiyu Aminu, on Thursday, March 4, 2021, in Abuja.

READ: FG sets committee to support tech start-ups with affordable internet access amid lockdown

The statement partly reads, “All public servants on GL12 and below have been directed to continue working from home till the end of March 2021.

Yemi-Esan said the latest directive was in adherence to the advice of the Presidential Task Force (PTF) on Covid-19.

The Head of Service of the Federation harped on the need to maintain the downward trend of the Covid-19 infection in the country and as such the reason for the extension of work from home directive.

While also emphasising the need for all public servants to continue to ensure strict compliance with the existing guidelines on the prevention and spread of the pandemic, she enjoined all Permanent Secretaries and Chief Executive officers to bring the content of the circular to all concerned and ensure strict compliance.

READ: Landlords offer incentives to counter “work from home” induced vacancy rates

What you should know

  • It can be recalled that the Federal Government in January 2021, announced the extension of work from home directive for civil servants on Grade Level 12 and below until February 28, 2021.
  • The directive was as a result of the second wave of the coronavirus pandemic which had seen a spike in infection rates across the country.

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