NAICOM explains policy on minimum paid-up share capital for insurance companies

The National Insurance Commission (NAICOM) explained on Tuesday that the minimum Paid-up Share Capital for insurance companies will be through any or a combination of the following; existing paid-up share capital, cash payment for new shares, retained earnings – capitalisation of undistributed profits.

Others include payment in kind such as properties, T-Bills, Shares, Bonds, for new shares issued, which must be converted to cash not later than three (3) months to the recapitalisation deadline and Share premium.

The commission made the clarification in a circular signed by the Pius Agboola, Director of policy and regulation.

According to NAICOM, “All components are to be converted to Paid-up Share Capital in compliance with
the recapitalisation exercise and applicable laws and regulations in Nigeria”.

“For Private Placement, appropriate clarification have been obtained from the relevant regulatory agency to the effect that insurance and reinsurance companies may offer more than 30 percent of the
existing issued and fully paid shares”.

“Submission of Recapitalisation Progress Report shall now be monthly. The report shall be submitted not later than five (5) working days after the end of each month, effective end of August, 2020”.

According to the commission, timeline of activities for the first phase of the recapitalisation exercise includes; submission of monthly recapitalization progress report on the fifth working day after the end of each month.

Others include; commencement of capital verification exercise by the commission, from 21st September to 29 January 2021.

“Communication of capital verification report to respective companies will be from 30 November 2020 to 29 January 2021”.

“Deadline for compliance with the first phase of the new minimum paid up capital by all existing companies is December 31, 2020”.