Insurance

House of Reps writes NAICOM, as efforts to suspend recapitalisation ticken

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Chuks Udo Okonta

The House of Representatives has officially communicated its position on the ongoing recapitalisation to the National Insurance Commission (NAICOM), Inspenonline can report.

The letter conveying the House position, which is for the process to be suspended was received by NAICOM today.

The letter it was learnt became necessary as stakeholders in the industry are anxiously waiting for NAICOM decision to enable them determine the next line of action on the recapitalisation which the 1st phase is supposed to end on December 31, 2020.

Investigation showed that most stakeholders are warried due to recent actions taken by shareholders and the House of Representatives to halt the recapitalisation process.

According to a concern stakeholder, NAICOM has to address the situation as keeping silent will be damaging to the industry.

The stakeholder said NAICOM as a responsible institution should speak out to enable investors and operators know the next step to take.

Inspenonline also gathered that NAICOM is being pressurised to align with the court orders and resolution of the House of Representatives.

Available information suggests that NAICOM may issue a news directives on the recapitalisation by tomorrow.

According to NAICOM, the recapitalisation
programme demand that life insurance firms meet a minimum paid-up capital of N8 billion, up from N2 billion; general insurance companies are expected to increase their paid-up capital to N10 billion from the earlier N3 billion.

Composite insurance (those that operate both general and life insurance) have been asked to recapitalise to the tune of N18 billion as against the pervious amount of N5 billion, while reinsurance businesses are now required to have a minimum capital of N20 billion from N10 billion that obtained in the past.

Worried about the impact of latest economic challenges such as the COVID-19 Pandemic and #EndSARS protest, the House of Representatives recently passed a resolution demanding that the NAICOM suspend its planned December 31, 2020 mandatory deadline for the first phase of 50 per cent– 60 per cent of the minimum paid-up share capital for insurance and reinsurance companies.

According to the House of Representatives, “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.”

Two shareholders groups have also risen up against the recapitalisation and had gone to court to challenge the process.

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