Underwriting companies are awaiting on the National Insurance Commission (NAICOM) to review their submission on recapitalization action plans following expiration of August 20, 2019 deadline given to the companies to submit their programme of compliance.
The Commission according to the recapitalization timetable has till September 17, 2019 to review the submissions, engage the companies and their director’s one-on-on if need be, and direct next steps.
NAICOM in a circular dated July 23rd, 2019, sent to the all insurance and reinsurance firms titled: ‘Re: Minimum Paid Up Share Capital Policy for Insurance and Reinsurance Companies’ signed by Pius Agboola, director, Policy & Regulation Directorate, NAICOM stated that the recapitalisation plan should include among others, capital status of the companies as at the last audited financial statements; board resolution on how to comply with the directives, and detailed action plan on how the funds for the recapitalisation are to be sourced with timeline and deliverables.
The circular also directed that companies intending to seek funds from the capital market were required to submit their plan of action on a file-and-use basis, just as, “companies that intend to merge or acquire another should submit their proposal after which they must comply with Section 30 and 31 of the Insurance Act 2003.”
The Commission noted that after the submission is made, it “shall review and provide response on the submitted plans on or before September 17, 2019,” adding that the review may require meeting the board and management of each of the insurance companies on its recapitalisation plan.
The Nigerian insurance regulator, NAICOM had in a circular issued on Monday May 20, 2019 announced increase in the paid-up share capital of life companies from N2 billion to N8 billion; General Business from N3 billion to N10 billion; Composite Business from N5 billion to N18 billion; and Reinsurance companies from N10 billion, to N20 billion.
According to the Commission, the minimum paid-up share capital requirement shall take effect from the commencement date of this circular (May 20, 2019) for new applications, while existing insurance and reinsurance companies shall be required to fully comply not later than 30th June 2020.
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